CIADA Auto Dealer News Dec 2012

CALIFORNIA’S BHPH ISSUE: A BLUEPRINT FOR LEGISLATIVE SUCCESS QR CODE ADVERTISING: THE NEXT BIG THING COMPLIANCE OVERDRIVE

inside

DECEMBER 2012

Negative SEO?

Page 6

Your website may be under attack by your competitors.

PRSRT StandardU.S. Postage

PAIDDALLAS, TEXASPermit No. 2079

V i s i t u s a t w w w . t h e c i a d a . c o m

AUTO DEALER NEWSC A R O L I N A S I N D E P E N D E N T A U T O M O B I L E D E A L E R S A S S O C I A T I O N

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DECEMBER 2012 C I A D A

3

w w w . t h e c i a d a . c o m

WHAT’S NEW

MAGAZINE CONTENTS

ADVERTISERS INDEX

04 Executive Director’s Message06 Negative SEO?08 Blueprint for Legislative Success12 Government Report18 QR Code Advertising24 Money Matters30 Compliance Overdrive

NATIONAL INDEPENDENT AUTOMOBILE DEALERS ASSOCIATIONWWW.NIADA.COM • WWW.NIADA.TVNIADA HEADQUARTERS: 2521 BROWN BLVD. • ARLINGTON, TX 76006-5203 PHONE (817) 640-3838FOR ADVERTISING INFORMATION CONTACT: TROY GRAFF (800) 682-3837 OR [email protected]. The Carolinas Independent Automobile Dealers Association is published bi-monthly by the National Independent Automobile Dealers Association Services Corporation, 2521 Brown Blvd., Arlington, TX 76006-5203; phone (817) 640-3838. Periodicals postage paid at Dallas, TX and at additional offices. POSTMASTER: Send address changes to NIADA State Publications, 2521 Brown Blvd., Arlington, TX 76006-5203. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of CIADA or the National Independent Automobile Dealers Association. Likewise, the appearance of advertisers, or their identification as members of NIADA, does not constitute an endorsement of the products or services featured. Copyright © 2012 by NIADA Services, Inc. All rights reserved.

STATE MAGAZINE MGR./SALES Troy Graff • [email protected] Andy Friedlander • [email protected] DIRECTOR Christy Haynes • [email protected] Nieman Printing

CIADA OFFICE

ADESA ...............................................................17 Ally ....................................................................13 Auto Search Technologies ..................................14AutoTrader.com ...........................Inside Back CoverAuto Use ............................................................25Carolina Auto Auction ................. Inside Front CoverCharleston Auto Auction........................Back CoverDealer Center ....................................................11Dealer Services Corp .........................................15Dodah.com ........................................................19GoldStar GPS .......................................................7Manheim.com ....................................................21NIADA Certified ..................................................26Protective ..........................................................23STARS GPS ........................................................24Sterling Credit ......................................................5United Acceptance .............................................27UsedCars.com by Dealix ......................................9Voisys ................................................................30

inside

The Carolinas Independent Automobile Dealers Association was organized in 1955 to assist members in enhancing their reputation in the marketplace, gain political influence and provide opportunities to interact with and meet other dealers for the purpose of sharing business and marketing ideas.

As a mature and long-standing Association, we are proud to maintain the ideals and principles set by the founders. But today, we offer more…far more. With a fulltime professional staff, modern technology and world class educational programs, we have become a strong, effective and influential organization that exists for one reason only: To represent the independent, non-franchised automobile dealer!

CIADA is the only not for profit association that represents the independent automobile dealer in the Carolinas with a National affiliation.

P.O. BOX 1088 • HARRISBURG, NC 28075 PHONE: 704-455-2117 OR 1-800-432-4232 FAX: 704-455-6810 • WWW.THECIADA.COM CIADA is a non-profit 501(c)6

PRESIDENTMALCOLM SHEALOR ASHLEY PREFERRED AUTO GROUP INC.MT. PLEASANT, SC

PRESIDENT ELECTMICHAEL DARROW THE AUTO FINDERS INC.DURHAM, NC

NC VICE PRESIDENTWILL DAVIS G & B AUTO SALES OF LOUISBURG INC.

SC VICE PRESIDENTLUKE GODWINGODWIN MOTORS INC.COLUMBIA, SC

TREASURERDARLA BOOHERDEAL DEPOT, INC.GREER, SC

SECRETARYKIM BRADSHAW 1ST NATIONS AUTO SALESBURLINGTON, N.C.

CHAIRMAN OF THE BOARDTRACY MYERSFRANK MYERS AUTO MAXX INC.WINSTON SALEM, NC

EXECUTIVE COMMITTEE

The Carolinas Independent Automobile Dealers Association was organized in 1955 to assist members in enhancing their reputation in the marketplace, gain political influence and provide opportunities to interact with and meet other dealers for the purpose of sharing business and marketing ideas. As a mature and long-standing Association, we are proud to maintain the ide-als and principles set by the founders. But today, we offer more…far more. With a fulltime professional staff, modern technology and world class educa-tional programs, we have become a strong, effective and influential organiza-tion that exists for one reason only: To represent the independent, non-franchised automobile dealer!

P.O. Box 1088 Harrisburg, NC 28075

Phone: 704-455-2117 or 1-800-432-4232 Fax: 704-455-6810 www.theciada.com

CIADA is a non-profit 501(c)6

Lisa Kluttz Ext 107

Jayne Harris Ext 111

Leslie Waslo Ext 110

Catherine Neely Ext 102

Carl Mischinski Ext 109

Krista Simmons Ext 103

John Brown Executive Director

Ext 105

Meet Our Professional Staff





Lisa Kluttz Ext 107







Ext 105






Lisa Kluttz Ext 107







Ext 105






Lisa Kluttz Ext 107







Ext 105


EXECUTIVE DIRECTOR JOHN BROWNEXT 105

ANGEL LONG DRIS ASSISTANTEXT 109

CATHERINE NEELYADMINISTRATIVE DIRECTOREXT 102

LISA KLUTTZCUSTOMER SERVICEEXT 103

JAYNE HARRISCUSTOMER SERVICEEXT 110

LESLIE WASLODRIS ACCOUNTSMANAGEREXT 108

JULIA ROGERSACCOUNTINGEXT 101

CIADA STAFF

WEAR WHAT YOU WANT. WE CAN’T SEE YOU.

www.niada.tv

SALES • OPERATIONS • F&I • REMARKETING • COMPLIANCE • LEGAL/REGULATORY

• SPECIAL FEATURES • INDUSTRY EVENTS

AUTOMOTIVE INDUSTRY NEWS & SPECIAL MONTHLY PROGRAMS

From the Staff and Executive Committee of CIADA

In addition to on-site classes, CIADA offers CETV on DVD and CE On-Line. Call 1-800-432-4232 for

additional information or visit us at www.theciada.com.

Carolina_1212.indd 3 11/16/12 2:31 PM

C I A D A DECEMBER 2012

4


E X E C U T I V E D I R E C T O R ’ S M E S SAG E

Time to (Re)Focus on BusinessThe elections are over. Regardless of the

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has been the little engine that could. The success of our nation and the Carolinas is directly attributable to the success of small business.6R�ZKHUH�GR�ZH�JR�IURP�KHUH"$V�VPDOO�EXVLQHVV�RZQHUV�ZH�PXVW�

DFWLYHO\�HQJDJH�RXU�HOHFWHG�RI¿FLDOV�DQG�policymakers to help further educate them RQ�ZKDW�GULYHV�VXFFHVV�DV�DQ�LQGHSHQGHQW�automobile dealer. Being a membership-EDVHG�RUJDQL]DWLRQ��RXU�FRPELQHG�VWUHQJWK�can make the difference in our success or failure.&OHDUO\��WKHUH�DUH�VHYHUDO�VWHSV�ZH�FDQ�

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Let’s begin by giving the Carolinas the best small business climate in America by LPSOHPHQWLQJ�D�IHZ�VLPSOH�LGHDV�

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Keeping you informed

JOHN BROWN EXECUTIVE DIRECTOR

AWA R D W I N N E R S

N.C. Dealers Earn PWI Community Values Award00�$XWR�6DOHV�RI�/XPEHUWRQ��1�&��

ZDV�DPRQJ�VL[�DXWR�GHDOHUVKLSV�KRQRUHG�ZLWK�FDVK�GRQDWLRQV�WR�WKHLU�FKDULWLHV�RI�FKRLFH�DV�ZLQQHUV�RI�3UHIHUUHG�:DUUDQWLHV�,QF�¶V�DQQXDO�9DOXH�$ZDUGV�7KH�SURYLGHU�RI�H[WHQGHG�VHUYLFH�

FRQWUDFWV�IRU�SUH�RZQHG�YHKLFOHV�HVWDEOLVKHG�WKH�DZDUGV�LQ��WR�identify and promote the company’s “core values.”00�$XWR�6DOHV��RZQHG�E\�&KULV�

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dealership’s name to Cub Scout 3DFN��³7KH\�EHOLHYH�LQ�IDPLO\��*RG��IULHQGVKLS�

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³7KH\�EHOLHYH�LQ�WKHPVHOYHV�DQG�ZKDW�they sell. Although both are very busy donating time and resources to both the %R\V�6FRXWV�DQG�WKHLU�FKXUFKHV��WKH\�manage to run a very successful business.”7KH�ZLQQHUV�LQFOXGHG�WKUHH�7H[DV�

dealerships.Southpoint Automotive of San Antonio

took the top prize – the Five Values $ZDUG�±�IRU�LWV�³LQYROYHPHQW�ZLWK�ORFDO�FKXUFKHV�DQG�VFKRROV��FRPPLWPHQW�WR�WKH�ORFDO�FRPPXQLW\��UHSXWDWLRQ�IRU�H[FHOOHQW�VHUYLFH��GHGLFDWLRQ�WR�GRLQJ�the right thing and relentless pursuit of H[FHOOHQFH�´�3:,�7H[DV�VDOHV�FRQVXOWDQW�Josh Schneer said.7KH�DZDUG�LQFOXGHG�D��GRQDWLRQ�WR�

the Children’s Hospital of Santa Rosa.,Q�DGGLWLRQ��-HII�(QJODQG�0RWRU�

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has demonstrated that he is honest and HWKLFDO�ZLWK�KLV�FXVWRPHUV��DQG�D�JUHDW�SDUWQHU�IRU�3UHIHUUHG�:DUUDQWLHV�´�3:,�sales consultant Raymond Hes said. “For H[DPSOH��*UHJ�GLVFRYHUHG�WKDW�D�FHUWDLQ�GLHVHO�WUXFN�ZDV�SURQH�WR�SUREOHPV��+H�FDOOHG�D�FXVWRPHU�ZKR�KDG�SXUFKDVHG�RQH�earlier and bought the vehicle back from him before any problems occurred.”

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N.C. Dealers Earn PWI Community Values Award

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Negative SEO?When you first hear the words

“Negative SEO” you probably think it sounds like an oxymoron. You know, like living dead, original copy, dark light or accidentally on purpose.

But two items that don’t seem to mesh are finally doing so.

During this election year, we have all seen the dirty tricks politicians have played on each other – negative smear campaigns and truth spinning. But don’t think those tactics are isolated to politics.

In the automotive industry, there are growing numbers of companies that like to play dirty as well, and if you are not aware of it yet, you need to continue reading.

With the constant uphill battle of your competition “flagging” your ads on Craigslist or leaving negative reviews on listing services such as Dealerrater .com, Google Places or even Merchant Circle, the war has just become a bit more complicated.

“Negative SEO” can mean any type of malicious harm intentionally caused to hurt the placement of a website’s search engine rankings. The thought process is, if you can’t become No. 1, then sabotage all of those ahead of you until you are No. 1.

Forcing one website to appear lower in the SERP (search engine rank placement) means other websites will climb higher in the SERP. That’s why negative SEO is considered a viable model by unethical website providers and online marketing companies.

The most common form of negative SEO is accomplished by linking a website to low-quality, unrelated businesses. Those are called “black-hat” links – they’re the bad guys.

Links are among the most important items when it comes to SEO (search engine optimization), but you want to make sure related industry businesses are linking into your website. Links can pass value to your website when done the right way. Links can harm your website when done the wrong way.

There are two types of linking that can be done with any website: internal linking and external linking. Internal linking is linking to resources inside your website/domain, while external linking links to web pages or other resources outside your website/domain.

A link on another website that points to your site can either have value to it and help your site or it can have a negative effect on your website and hurt you. External links that point to your site are a common way negative SEO is applied, and it is very hard to see because it all happens away from your site and is nearly invisible.

Related incoming business links: You might have heard the term “link swapping.” That’s when a business asks you to place a link to it on your website in exchange for a link from its website.

That can be beneficial if the business is in the same industry as you are. For example, if a used car dealership swaps links with an auto repair/service facility, a towing company or a tire sales business.

There is a reason for you to swap links because you are helping your customers navigate to a product or service that you might not offer that could be considered helpful. Value can be associated to both websites in that process.

Each of the links from the other website that points to your website counts as an “incoming/inbound link” to your site. Other related links that can qualify are from third-party paid listing services, social media outlets, online video channels and business directory listings.

If you are link swapping with other businesses, you always want to make sure the links you are pointing to are valid websites that are still in business. If you are linking to an off-line website, or “dead link,” as it is called, it can easily wipe out the value of hundreds of positive links.

Disassociated business links and unnatural links: Disassociated

links are considered an attempt to try to boost the ranking of your site for the sole purpose of increasing your position.

Some businesses think all links are good links. Right? Wrong! Make sure links pointing to your website are within your general industry – stay away from disassociated links, such as linking a used car dealership with, say, a flower shop, a hardware store or a movie theater.

In addition to disassociated links, there are companies referred to as “link farms” that advertise they’ll sell you hundreds or thousands of incoming/inbound links, which are referred to as “backlinks.” The companies will point those links to your website for a monthly fee.

Most of the time, the companies will claim the links they provide will be within the same industry as your business, but there is no real way to guarantee that. Google recently released an update called the Penguin that in part identifies websites in the link farm business that offer unnatural links. If you are found on the receiving end of those links, you could have some serious issues with your online placement.

Because there is nothing to keep a competitor from signing up your website’s URL with those kinds of companies, and the links do not appear on your website, that style of attack can easily go unnoticed.

Be aware of who is linking to you. Periodically looking into what links are being directed to your website can help detect negative SEO campaigns that have been launched against your business, as well as identify any links that are unrelated to your industry.

There are many free websites you can use to check for backlinks. A good free site to check is www.ranksignals.com, which allows you to identify the total number of backlinks as well as get a page rank of the links that are pointing to your website.

BY MICHAEL D. JACKSON CEO OF AUTO SEARCH TECHNOLOGIES, INC. HE CAN BE REACHED AT (949) 608-0809 OR [email protected].

Negative campaigning isn’t limited to politics – your competitors could be sabotaging your website

C OV E R S T O RY

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A BLUEPRINT FOR SUCCESS

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OLPLWHG�WR�RQO\�UHJXODWRUV��EXW�KDV�DOVR�EHHQ�IXHOHG�E\�VWDWH�OHJLVODWRUV��WKH�PHGLD�and some consumer advocate groups.

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industry had taken a real interest in IROORZLQJ�WKH�RSHUDWLRQDO�FRPSOH[LWLHV�RI�%+3+��6XGGHQO\��IRU�WKH�¿UVW�WLPH� LQ�D�YHU\�SXEOLF�ZD\��%+3+�ZDV�XQGHU� a microscope and the legislative die ZDV�FDVW�0DQ\�ZHUH�DVNLQJ�LI�LW�ZDV�UHDOO\�

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and other industry stakeholders pulled XS�FKDLUV�WR�ZDWFK�WKH�GUDPD�XQIROG�LQ�&DOLIRUQLD��PDQ\�%+3+�GHDOHUV�EHJDQ�WR�ZRQGHU�KRZ�WKH\�ZRXOG�WHOO�WKH�LQWHQVHO\�FXVWRPHU�VHUYLFH�%+3+�VWRU\�WR�VWDWH�OHJLVODWRUV��FRPPLWWHH�PHPEHUV�DQG�WKHLU�

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The bills raced through the Democratic-controlled Senate and

$VVHPEO\��DQG�LQ�$SULO�ZH�UHDOL]HG�WKH�WUDGLWLRQDO�OREE\LQJ�HIIRUWV�LQ�ZKLFK�ZH�ZHUH�KHDYLO\�HQJDJHG�QHHGHG�WR�EH�augmented by additional public relations VXSSRUW��DQG�WKH�IUDJPHQWHG�%+3+�YRLFH�QHHGHG�WR�EH�XQL¿HG�'XULQJ�D�PHHWLQJ�DW�WKH�1DWLRQDO�

$OOLDQFH�RI�%X\�+HUH�3D\�+HUH�'HDOHUV��1$%'��&RQIHUHQFH�WKDW�PRQWK��.HQ�6KLOVRQ�DVNHG�WKDW�1,$'$�OHDG�D�GLVFXVVLRQ�ZLWK�WKH�YDULRXV�%+3+�industry stakeholders to determine ZD\V�ZH�FRXOG�DOO�ZRUN�WRJHWKHU�PRUH�FROODERUDWLYHO\��VLQFH�ZH�ZHUH�DOO�interested in the same outcome. 'XULQJ�WKDW�PHHWLQJ��UHSUHVHQWDWLYHV�

IURP�1,$'$��1$%'��'ULYH7LPH��-�'��%\ULGHU��&DU+RS��+XGVRQ��&RRN�DQG�a recently formed group of concerned LQGHSHQGHQW�%+3+�GHDOHUV�±�PRVW�RI�ZKRP�DUH�1,$'$�PHPEHUV�±�FDOOHG�WKH�&RPPXQLW\�$XWR�)LQDQFH�$VVRFLDWLRQ��DOO�JDWKHUHG�DQG�DLUHG�WKHLU�IHHOLQJV��FRQFHUQV�DQG�GHVLUHV�WR�ZRUN�WRJHWKHU�IRU�D�FRPPRQ�FDXVH��:H�UHDOL]HG�ZH�ZHUH�stronger collectively than individually. $QG�VR�D�PRUH�XQL¿HG�YRLFH�ZDV�DJUHHG�RQ��DQG�WKH�¿QDO�SLHFH�WR�ZLQQLQJ�WKH�¿JKW�LQ�&DOLIRUQLD�ZDV�LQ�SODFH��7KH�FRDOLWLRQ�GHFLGHG�1,$'$�ZRXOG�WDNH�WKH�lead position. 1RW�ZDVWLQJ�DQ\�WLPH��1,$'$¶V�QHZO\�

IRUPHG�DG�KRF�%+3+�³FRDOLWLRQ´�UDLVHG�QHDUO\��DQG�HQOLVWHG�WKH�KHOS�RI�D�SXEOLF�UHODWLRQV�¿UP�WR�WHOO�WKH�%+3+�VWRU\�DQG�VKRZ�WKDW�DXWR�GHDOHUV�ZHUH�QRW�the only business concerns in the state opposed to the bills.,$'$&¶V�OREE\LVW��%LOO�'RKULQJ��DQG�

H[HFXWLYH�GLUHFWRU��/DUU\�/DVNRZVNL��continued to march the halls of the OHJLVODWXUH�DQG�ZRUN�ZLWK�RI¿FLDOV�DW�WKH�DMV and Department of Corporations.

YOUR VOICE HEARD: BY STEVE JORDAN

NIADA CHIEF OPERATING OFFICER

H OW CA L I FO R N I A’ S B U Y H E R E - PAY H E R E L E G I S L AT I O N G A LVA N I Z E D T H E I N D U S T RY

C O N T I N U E D O N PAG E 10

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10


'HDOHUV�ZHUH�H[SHFWHG�WR�EH�DJDLQVW�WKH�ELOOV��EXW�PDQ\�ORFDO�DQG�FRXQW\�JRYHUQPHQW�RI¿FLDOV��&KDPEHUV�RI�Commerce and concerned consumers EHJDQ�WR�YRLFH�WKHLU�RSSRVLWLRQ�DV�ZHOO��:H�IRUPHG�WKH�³&RDOLWLRQ�WR�3URWHFW�2XU�)UHHGRP�WR�'ULYH�´�FRPSOHWH�ZLWK�D�ZHEVLWH�DQG�)DFHERRN�SUR¿OH��$V�RXU�RSSRVLWLRQ�VXSSRUW�JUHZ��ZH�

began to ask legislators to look more FORVHO\�DW�KRZ�WKH�SDVVDJH�RI�WKH�ELOOV�ZRXOG�LPSDFW�VWDWH�VDOHV�WD[�UHYHQXHV��:H�FDOOHG�IRU�D�¿VFDO�LPSDFW�VWXG\��Based on our internal industry data DQG�SUHOLPLQDU\�UHVHDUFK��1,$'$�determined that losses in revenue for &DOLIRUQLD�FRXOG�UDQJH�DQ\ZKHUH� IURP��PLOOLRQ�WR��PLOOLRQ�dollars annually.7KDW�ZDV�FRUURERUDWHG�E\�&DOLIRUQLD¶V�

%RDUG�RI�(TXDOL]DWLRQ��ZKLFK�DJUHHG�WKDW�VXFK�UHYHQXH�ORVVHV�ZRXOG�KDYH�D�GHYDVWDWLQJ�GRZQVWUHDP�HIIHFW�IRU�FRXQW\�and local governments that rely heavily on state funding for basic constituent VHUYLFHV�OLNH�SROLFH�DQG�¿UH�SURWHFWLRQ�$GGLWLRQDOO\��ZH�YRLFHG�RXU�FRQFHUQ�

WKDW�WKH�SDVVDJH�RI�WKH�ELOOV�ZRXOG�LQ�IDFW�EH�D�YLRODWLRQ�RI�WKH�HTXDO�SURWHFWLRQ�clauses of the constitutions of California DQG�WKH�8QLWHG�6WDWHV�±�DVNLQJ�RQH�segment of the auto industry to play by operational guidelines that do not DSSO\�WR�WKH�HQWLUH�LQGXVWU\��7KDW�ZDV�DQ�DUJXPHQW�ZH�ZHUH�SUHSDULQJ�WR�PDNH�LQ�WKH�FRXUWV��LI�QHFHVVDU\��LQ�RSSRVLWLRQ�WR�6%��&RQFHUQHG�PRVWO\�ZLWK�EORFNLQJ�WKH�

inherently overreaching restrictions on %+3+�GHDOHUV�SURSRVHG�LQ�6%��ZH�IRFXVHG�OHVV�RQ�$%��DQG�$%��7KRXJK�ZH�IXQGDPHQWDOO\�RSSRVHG�DOO�WKUHH�ELOOV��RXU�%+3+�FRDOLWLRQ�IHOW�WKHUH�ZHUH�SURYLVLRQV�LQ�$%��DQG�$%��WKDW�ZRXOG�PDNH�VHQVH�WR�SURWHFW�FRQVXPHUV�DQG�ZRXOG�QRW�XQGXO\�LPSHGH�%+3+�RSHUDWLRQV��8OWLPDWHO\��DOO�WKUHH�ELOOV�SDVVHG�WKH�

legislature by the end of August and

ZHUH�VHQW�WR�*RY��-HUU\�%URZQ�IRU�¿QDO�passage or veto. Our focus then shifted WR�OREE\LQJ�WKH�JRYHUQRU��KLV�FKLHI�legislative counsel and the state agencies FKDUJHG�ZLWK�SURYLGLQJ�UHJXODWRU\�oversight to the industry on passage. 2Q�6DWXUGD\��6HSW��D�GD\�

EHIRUH�KLV�YHWR�SRZHU�ZDV�VHW�WR�H[SLUH�IRU�WKLV�\HDU¶V�OHJLVODWLYH�VHVVLRQ��*RY��%URZQ�YHWRHG�6%��VD\LQJ�KH�ZDV�³QRW�yet convinced the evidence merits the regulatory oversight of this bill.”1,$'$�FRXOGQ¶W�DJUHH�PRUH��:LWK

RQH�VWURNH�RI�WKH�SHQ��6%��ZDV�GHDG��)RU�QRZ��ZH�DOO�EUHDWKHG�D�FROOHFWLYH� sigh of relief.

As for the media and consumer DGYRFDWHV��WKH\�FODLPHG�YLFWRU\�IRU�SDVVLQJ�$%��DQG��1,$'$ LV�¿QH�ZLWK�WKDW�±�ZH�GLG�QRW�VHH� WKRVH�QHZ�ODZV�XQGXO\�LPSHGLQJ� %+3+�RSHUDWRUV�$IWHU�WKH�YHWR��WKH�L.A. Times reporter

ZKR�ZURWH�WKH�RULJLQDO�VHULHV�RI�DUWLFOHV�ZURWH��³%+3+�GHDOHUV�FRQJUDWXODWHG�RQH�DQRWKHU�RQ�6XQGD\��DQG�FUHGLWHG�D�lobbying effort that had little impact on ODZPDNHUV�EXW�DSSDUHQWO\�FDXJKW�WKH�governor’s ear.”$JDLQ��ZH�FRXOGQ¶W�DJUHH�PRUH��&OHDUO\��

RXU�OREE\LQJ�HIIRUWV�ZHUH�QHYHU�JLYHQ�credence by California’s legislators EHFDXVH�WKH\�ZHUH�HLWKHU�XQZLOOLQJ�RU�LQFDSDEOH�RI�VHHLQJ�ZKDW�WKH�JRYHUQRU�VDZ��7R�SURYLGH�FRPPRQ�VHQVH�FRQVXPHU�SURWHFWLRQ��\RX�GRQ¶W�KDYH� WR�GR�LW�DW�WKH�H[SHQVH�RI�GHYDVWDWLQJ�small business. ,Q�WKH�HQG��*RY��%URZQ¶V�YHWR�JDYH�

HYHU\RQH�ZKDW�WKH\�ZDQWHG��7KH�consumer advocates received additional SURWHFWLRQ�WKDW�1,$'$�LQ�IDFW�EHOLHYHV�%+3+�GHDOHUV�VKRXOG�EH�RIIHULQJ�WKHLU�FXVWRPHUV��DQG�WKH�LQGXVWU\�ZDV�VKLHOGHG�IURP�H[FHVVLYH��EXVLQHVV�HQGLQJ�UXOHPDNLQJ�WKDW�ZRXOG�KDYH�ironically led to less access to affordable transportation for the very consumers WKH�OHJLVODWRUV�DQG�PHGLD�ZHUH�WU\LQJ� to protect. 6KRXOG�VLPLODU�LVVXHV�DULVH�QH[W�\HDU��

1,$'$�ZLOO�EH�SUHSDUHG�WR�HQWHU�WKH�fray to protect our members again. 0RVW�LPSRUWDQWO\��OHW¶V�QRW�IRUJHW�WKLV�ZRXOG�QRW�KDYH�KDSSHQHG�ZLWKRXW�the combined efforts of the industry’s VWDNHKROGHUV�ZRUNLQJ�WRJHWKHU�QDWLRQDOO\�DQG�LQ�&DOLIRUQLD��PDUVKDOLQJ�RXU�resources and making our collective voice heard on behalf of our dealers and their customers.

BY STEVE JORDANNIADA CHIEF OPERATING OFFICER

C O N T I N U E D F RO M PAG E 8

A BLUEPRINT FOR SUCCESSYOUR VOICE HEARD:

Here’s a look at the requirements of Senate Bill 956, Assembly Bill 1447 and Assembly Bill 1534:SB 956Would have required BHPH dealers to:��/IX�QV\MZM[\�ZI\M[�I\� ��XMZKMV\�XT][�\PM�NML�ZI\M�

�K]ZZMV\Ta�WVM&NW]Z\P�WN� �XMZKMV\��;J\IQV�I�TQKMV[M�]VLMZ�\PM�/ITQNWZVQI�2QVIVKM�

8MVLMZ[�8I_�IVL�JM�ZMO]TI\ML�Ja�\PM�0MXIZ\UMV\�WN�/WZXWZI\QWV[

��-TTW_�IV�IKKW]V\�\W�JMKWUM� ��LIa[�XI[\�L]M�JMNWZM�QVQ\QI\QVO�ZMKW^MZa�WZ�ZMXW[[M[[QWV�WN�\PMQZ�I[[M\

��A[M�I�TQKMV[ML�ZMXW[[M[[QWV�IOMVKa�\W�XPa[QKITTa�ZMXW[[M[[�I�^MPQKTM

��8QUQ\�ZMXW[[M[[QWV�IVL�ZMKW^MZa�NMM[�\W�*��WV�XI[\�L]M�IKKW]V\[�@PW[M�NMM[�KW]TL�VW\�JM�KWTTMK\ML�_Q\PQV��LIa[

AB 1447Requires BHPH dealers to:��<ZW^QLM�K][\WUMZ�LQ[KTW[]ZM�WN�\PM�][M�WN�3<?�WZ�

[\IZ\MZ&QV\MZZ]X\�LM^QKM[�WV�^MPQKTM[�[WTL��<ZW^QLM�I��&LIa� ��&UQTM�TQUQ\ML�_IZZIV\a�WV�

M^MZa�^MPQKTM�[WTL

AB 1534Requires BHPH dealers to:��-NNQ`�I�TIJMT�WV�IVa�][ML�^MPQKTM�JMQVO�WNNMZML�NWZ�

ZM\IQT�[ITM�\PI\�[\I\M[�\PM�ZMI[WVIJTM�UIZSM\�^IT]M�WN�\PI\�^MPQKTM

Definition of BHPH Dealer-��.]a�4MZM&<Ia�4MZM��LMITMZ�Q[�I�LMITMZ�I[�LMNQVML�QV�?MK\QWV��_PW�Q[�VW\�W\PMZ_Q[M�M`XZM[[Ta�M`KT]LML�Ja�?MK\QWV�� IVL�_PW�LWM[�ITT�WN�\PM�NWTTW_QVO�(a) 1V\MZ[�QV\W�KWVLQ\QWVIT�[ITM�KWV\ZIK\[�_Q\PQV�\PM�UMIVQVO�WN�[]JLQ^Q[QWV��I��WN�?MK\QWV�� WN�\PM�/Q^QT�/WLM�IVL�[]JRMK\�\W�\PM�XZW^Q[QWV[�WN�/PIX\MZ��J��KWUUMVKQVO�_Q\P�?MK\QWV�� WN�@Q\TM� ��WN�<IZ\��WN�0Q^Q[QWV��WN�\PM�/Q^QT�/WLM�WZ�TMI[M�KWV\ZIK\[�_Q\PQV�\PM�UMIVQVO�WN�?MK\QWV��WN�\PM�/Q^QT�/WLM�IVL�[]JRMK\�\W�\PM�XZW^Q[QWV[�WN�/PIX\MZ��L��KWUUMVKQVO�_Q\P�?MK\QWV��WN�@Q\TM� ��WN�<IZ\��WN�0Q^Q[QWV��WN�\PM�/Q^QT�/WLM(b) -[[QOV[�TM[[�\PIV��XMZKMV\�WN�ITT�]VZM[KQVLML�KWVLQ\QWVIT�[ITM�KWV\ZIK\[�IVL�TMI[M�KWV\ZIK\[�\W�]VINNQTQI\ML�\PQZL&XIZ\a�NQVIVKM�WZ�TMI[QVO�[W]ZKM[�_Q\PQV��LIa[�WN�\PM�KWV[]UUI\QWV�WN�\PW[M�KWV\ZIK\[(c)�2WZ�X]ZXW[M[�WN�\PQ[�[MK\QWV�I�KWVLQ\QWVIT�[ITM�KWV\ZIK\�LWM[�VW\�QVKT]LM�I�KWV\ZIK\�NWZ�\PM�[ITM�WN�I�UW\WZ�^MPQKTM�QN�ITT�IUW]V\[�W_ML�]VLMZ�\PM�KWV\ZIK\�IZM�XIQL�QV�N]TT�_Q\PQV��LIa[(d)�@PM�LMXIZ\UMV\�UIa�XZWU]TOI\M�ZMO]TI\QWV[�I[�VMKM[[IZa�\W�QUXTMUMV\�\PQ[�[MK\QWV@PM�\MZU��J]a&PMZM&XIa&PMZM��LMITMZ�LWM[�VW\�QVKT]LM�IVa�WN�\PM�NWTTW_QVO�(a)�-�TM[[WZ�_PW�XZQUIZQTa�TMI[M[�^MPQKTM[�\PI\�IZM�\_W�UWLMT�aMIZ[�WTL�WZ�VM_MZ(b) -�LMITMZ�\PI\�LWM[�JW\P�WN�\PM�NWTTW_QVO�(1) /MZ\QNQM[� ��XMZKMV\�WN�][ML�^MPQKTM�QV^MV\WZa�WNNMZML�NWZ�[ITM�I\�ZM\IQT�XZQKM�X]Z[]IV\�\W�?MK\QWV� � � �(2)�9IQV\IQV[�IV�WV[Q\M�[MZ^QKM�IVL�ZMXIQZ�NIKQTQ\a�\PI\�Q[�TQKMV[ML�Ja�\PM�.]ZMI]�WN�-]\WUW\Q^M�>MXIQZ�IVL�MUXTWa[�I�UQVQU]U�WN�NQ^M�UI[\MZ�I]\WUWJQTM�\MKPVQKQIV[�\PI\�IZM�KMZ\QNQML�Ja�\PM�:I\QWVIT�5V[\Q\]\M�NWZ�-]\WUW\Q^M�?MZ^QKM�1`KMTTMVKM

DETAILS OF THE CALIFORNIA BILLS

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12


12

L AT E S T G OV E R N M E N TA L I S S U E S

NIADA Legislative Team Update+HUH¶V�D�UXQGRZQ�RI�VRPH�RI�WKH�

latest governmental issues and activity affecting the used car industry from Sante Esposito of Federal Advocates DQG�1,$'$�OHJLVODWLYH�UHJXODWRU\�FRPSOLDQFH�FRXQVHO�6KDXQ�3HWHUVHQ�

Auction Sales:KLOH�&RQJUHVV�KDV�QRW�RI¿FLDOO\�VDLG�

DQ\WKLQJ�RQ�WKH�LVVXH�LQ�PRQWKV��WKHUH�LV��DV�SUHYLRXVO\�UHSRUWHG��VWLOO�LQWHUHVW�IURP�6HQ��3U\RU�DQG�WKH�+RXVH�(QHUJ\�DQG�&RPPHUFH�&RPPLWWHH�LQ�H[SORULQJ�the impact of the current auction VDOH�SURFHVV�RQ�FRQVXPHUV�DQG�ODZ�enforcement.7R�WKDW�HQG��6WHYH�/HKUPDQ��OHJLVODWLYH�

DVVLVWDQW�WR�6HQ��3U\RU��YLVLWHG�$'(6$¶V�:DVKLQJWRQ�DUHD�DXFWLRQ�IDFLOLW\�RQ�$XJ��WR�YLHZ�KH�DXFWLRQ�SURFHVV�¿UVWKDQG��$W�WKH�HQG�RI�WKH�YLVLW��/HKUPDQ�VDLG� the senator and other interested OHJLVODWRUV�³GRQ¶W�KDYH�D�SUREOHP�ZLWK�ZKDW�JRHV�RQ�DW�WKH�DXFWLRQ´�EXW�FRXOG�KDYH�LVVXHV�ZLWK�³ZKDW�KDSSHQV�ZLWK�WKH�auctioned cars.”/HKUPDQ�DVNHG�LI�1,$'$�FRXOG�

SURYLGH�VRPH�WKRXJKWV�UHJDUGLQJ�KRZ�WR�DGGUHVV�WKDW�VLWXDWLRQ��HVSHFLDOO\�DV�LW�UHODWHV�WR�ODZ�HQIRUFHPHQW��EXW�ZH�SUHIHU�QRW�WR�UHVSRQG�XQWLO�ZH�UHFHLYH�PRUH�FODUL¿FDWLRQ�DV�WR�H[DFWO\�ZKDW�LVVXH�problem legislators are trying to solve.5HJDUGOHVV��OHJLVODWLRQ�LV�QRW�OLNHO\�WR�

be introduced this year.

Rental Cars (S.1445, S.3502 and H.R. 6094)

There have been reports that consumer advocates are nearing a deal ZLWK�UHQWDO�FDU�FRPSDQLHV�RQ�WKH�LVVXH�of banning rentals of motor vehicles under safety recall until the defect or QRQFRPSOLDQFH�LV�UHPHGLHG��6R�IDU��WKHUH�LV�QRWKLQJ�GH¿QLWLYH��DQG�LW¶V�QRW�FOHDU�ZKHWKHU�WKH�UXPRUHG�GHDO�ZRXOG�UHTXLUH�legislation.$�ELOO�FRYHULQJ�WKH�UHQWDO�UHFDOO�

LVVXH��6��ZDV�LQWURGXFHG�LQ��E\�6HQ��&KXFN�6FKXPHU��'�1<��DQG�cosponsored by Sens. Dianne Feinstein DQG�%DUEDUD�%R[HU��ERWK�&DOLIRUQLD�'HPRFUDWV��,W�ZDV�PRGL¿HG�WKLV�VXPPHU�E\�+�5��LQWURGXFHG�E\�5HS��/RLV�&DSSV��'�&DOLI��DQG�DQ�XSGDWHG�6HQDWH�ELOO��6��LQWURGXFHG�E\�%R[HU�DQG�co-sponsored by Feinstein.%R[HU�KDV�VSDUUHG�ZLWK�UHQWDO�

FDU�FRPSDQLHV�WKLV�\HDU��FDOOLQJ�IRU�(QWHUSULVH��$YLV��+HUW]�DQG�'ROODU�Thrifty to sign a pledge promising not to rent or sell cars under safety recall until WKH�FDUV�DUH�¿[HG��2QO\�+HUW]�VLJQHG� WKH�SOHGJH��7KH�RWKHUV�VDLG�ZKLOH�WKH\�support legislation to ensure rental FDU�VDIHW\��FRPSDQLHV�DGGUHVV�VDIHW\�recalls in a timely manner and insist any legislation should also cover other EXVLQHVVHV�WKDW�WUDQVSRUW�SDVVHQJHUV��OLNH�OLPRXVLQH�DQG�WD[L�FRPSDQLHV�

S.1449, MAP-21,Q�6HSWHPEHU��6HQ��%R[HU�DQQRXQFHG�

VKH�LV�DOUHDG\�ZRUNLQJ�RQ�OHJLVODWLRQ�WR�VXFFHHG�WKH�0RYLQJ�$KHDG�IRU�3URJUHVV�LQ�WKH��VW�&HQWXU\�$FW��0$3��WKH��ELOOLRQ�IHGHUDO�WUDQVSRUWDWLRQ�ELOO�WKDW�ZDV�VLJQHG�LQWR�ODZ�-XO\��0$3��H[SLUHV�LQ�DERXW��GD\V��

Congress is likely to be in legislative session for less than half that time and is OLNHO\�WR�EH�SUHRFFXSLHG�ZLWK�D�QXPEHU�of higher priority issues.%R[HU�VDLG�KHU�JRDO�LV�³WR�¿QG�D�

GHSHQGDEOH�IXQGLQJ�VRXUFH�DQG�WR�ZRUN�LQ�D�ELSDUWLVDQ�ZD\�WR�¿QG�WKDW�IXQGLQJ�VRXUFH��,�UHDOO\�EHOLHYH�WKDW�WKH�+LJKZD\�Trust Fund should be funded through user fees.”7KRVH�IHHV�PLJKW�LQFOXGH�LQGH[LQJ�WKH�

JDV�WD[�WR�LQÀDWLRQ��EXW�SUREDEO\�ZRXOG�not include a vehicle miles-traveled IHH��ZKLFK�%R[HU�VDLG�UDLVHV�SULYDF\�FRQFHUQV��(YHQ�D�JDV�WD[�LQFUHDVH�ZRQ¶W�EH�HQRXJK��VKH�VDLG��LI�YHKLFOHV�NHHS�JHWWLQJ�PRUH�IXHO�HI¿FLHQW�³:H¶YH�JRW�WR�¿JXUH�RXW�RWKHU�ZD\V�´�

%R[HU�VDLG��³)RU�H[DPSOH��,�GULYH�D�K\EULG�FDU�DQG�,�JHW�DERXW��PLOHV�WR�WKH�JDOORQ��,¶P�QRW�SD\LQJ�P\�IDLU�VKDUH�DW�DOO��,I�,�JHW�DQ�HOHFWULF�FDU��,�ZRQ¶W�SD\�anything.”

H.R.860 and S.110, Promoting &KDULWDEOH�'RQDWLRQV�RI�4XDOL¿HG�Vehicles Act of 2011:KLOH�WKH�6HQDWH�ELOO��LQWURGXFHG�

E\�6HQ��-RKQ�(QVLJQ��5�1HY��KDV�QR�FRVSRQVRUV��WKH�LGHQWLFDO�+RXVH�ELOO��LQWURGXFHG�E\�5HS��-RKQ�/DUVRQ��'�&RQQ��QRZ�KDV��FRVSRQVRUV�±�DOPRVW��SHUFHQW�RI�WKH�+RXVH�membership.

The bill amends the Internal Revenue Code to make it easier to WDNH�D�FKDULWDEOH�WD[�GHGXFWLRQ�IRU�

FRQWULEXWLRQV�RI�TXDOL¿HG�YHKLFOHV��PRWRU�YHKLFOHV��ERDWV�RU�DLUSODQHV��$FFRUGLQJ�WR�WKH�,56��DV�D�UHVXOW�RI�Congress tightening the deductibility UXOHV�LQ��WKH�YROXPH�RI�XVHG�FDU�GRQDWLRQV�IHOO�E\�DERXW��SHUFHQW�:LWK�VXFK�D�ODUJH�QXPEHU�RI�ELOO�

sponsors and obvious bipartisan VXSSRUW��RQH�ZRXOG�H[SHFW�WKH�ELOO�WR�PRYH�TXLFNO\�DQG�ZLWKRXW�FRQWURYHUV\�through the legislative process. That has not happened for several reasons – the VRPHZKDW�SUREOHPDWLF�WD[�GHGXFWLRQ�KLVWRU\�RI�PRWRU�YHKLFOH�GRQDWLRQV��WKH�fact that no revenue bills are moving LQ�WKH�+RXVH��WKH�XQFHUWDLQW\�RI�WKH�ELOO¶V�UHYHQXH�LPSDFW��WKH�ODFN�RI�6HQDWH�LQWHUHVW�DQG�VXSSRUW��WKH�IDFW�WKDW�the issue is not a priority for House OHDGHUVKLS��DQG�WKH�OLPLWHG�DPRXQW�of time remaining in the Congress to consider legislation.

S. 3468, the Independent Agency Regulatory Analysis Act of 20122Q�$XJ��6HQ��3RUWPDQ��5�2KLR��

LQWURGXFHG�6��WKH�,QGHSHQGHQW�Agency Regulatory Analysis Act of ��7KH�ELOO�ZDV�UHIHUUHG�WR�WKH�Senate Homeland Security Committee. 8QGHU�WKH�ELOO��WKH�:KLWH�+RXVH�ZRXOG�UHFHLYH�H[SOLFLW�DXWKRULW\�WR�LQÀXHQFH�the rulemaking process of regulatory DJHQFLHV��LQFOXGLQJ�WKH�)HGHUDO�7UDGH�Commission the Consumer Financial 3URWHFWLRQ�%XUHDX�7KH�3UHVLGHQW��WKURXJK�DQ�H[HFXWLYH�

RUGHU��ZRXOG�EH�DOORZHG�WR�PDQGDWH�DW�WKH�PLQLPXP�D��SRLQW�WHVW�IRU�UXOHPDNLQJ��LQFOXGLQJ�¿QGLQJ�³DYDLODEOH�DOWHUQDWLYHV�WR�GLUHFW�UHJXODWLRQ�´�HYDOXDWLQJ�WKH�³FRVWV�DQG�WKH�EHQH¿WV�´�DQG�SHULRGLFDOO\�UHYLHZLQJ�H[LVWLQJ�UXOHV�to make agencies “more effective or less burdensome.”)RU�UXOHV�ZLWK�DQ�DQQXDO�HIIHFW�RI�

��PLOOLRQ�RU�PRUH�RQ�WKH�HFRQRP\��DJHQFLHV�ZRXOG�VXEPLW�WKHLU�SURSRVDOV�WR�WKH�:KLWH�+RXVH¶V�2I¿FH�RI�,QIRUPDWLRQ�and Regulatory Affairs. A negative UHYLHZ�IURP�WKH�RI¿FH�ZRXOG�GHOD\�D�UXOH�for up to three months and force the DJHQF\�WR�H[SODLQ�LWV�DSSURDFK�,I�HQDFWHG��WKH�ELOO�ZRXOG�FOHDUO\�

impact various aspects of the regulatory SURFHVV��WKH�PRVW�REYLRXV�EHLQJ�WLPLQJ�

C O N T I N U E D O N PAG E 1 4

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14


Buyers, sellers and consigners across the independent auto auction industry can now seamlessly use ShipCarsNow from Auction Edge Inc.’s auction management platform, allowing customers to ship multiple vehicles to multiple destinations and take advantage of built-in volume pricing.

ShipCarsNow is part of Union Pacific, which transports approximately one out of three new cars sold in the U.S. With more than 1,300 quality trucking companies under contract and strategic ties with major railroads, ShipCarsNow offers nationwide, door-to-door rail and direct truck service at competitive pricing. ShipCarsNow provides Auction Edge members with the capability to transport cars safely and securely, supported by 24/7 customer service.

“We want to make it as easy and as cost-efficient as possible for our Auction Edge customers to manage shipping and delivery of their sales and purchases,” Auction Edge senior vice president Scott Finkle said. “Dealers and consigners with AuctionACCESS IDs will be able to set up a ShipCarsNow account with a couple of clicks and start shipping vehicles immediately.”

For more information, visit www.shipcarsnow.com or call 866-207-3360.

Auction Edge, a national remarketing platform that powers more than 130 independent auto auctions in North America, also introduced a new function that allows key auction employees to view credit lines and available credit for dealers with Automotive Finance Corporation (AFC) floorplans, enabling auction personnel to help the dealer complete purchases and quickly floorplan their vehicles through AFC.

FOR MORE INFORMATION, VISIT WWW.AUCTIONEDGE.COM.

I N D U S T RY N E W S

Auction Edge Integrates with ShipCarsNow, AFC

ast

Department of LaborLast year, the Department of Labor

finalized a rule to eliminate the overtime exempt status for service writers and service advisors. But as part of the department’s 2012 appropriation legislation, Congress prohibited the department from using any funds to enforce that rule.

That appropriation legislation expires in March, and the prohibition will also expire unless it is extended by new legislation.

Internal Revenue ServiceThe Financial Crimes Enforcement

Network (FinCEN) announced that a variety of businesses, including auto dealers, are now able to electronically file Form 8300, Reports of Cash Payments Over $10,000 Received in a Trade or Business, using the Bank Secrecy Act electronic filing system at http://bsaefiling.fincen.treas.gov/main.html.

E-Filing is a free system that allows businesses to submit their FinCEN reports through a secure network. Paper filings of Form 8300 will continue to be accepted for now, but businesses are encouraged to begin E-Filing.

Federal Trade CommissionThe FTC has published a guide called

Marketing Your Mobile App: Get it Right from the Start, to help mobile app developers and users comply with truth-in-lending and privacy laws.

The guide highlights that all required disclosures must be made clearly and conspicuously and suggests apps only collect necessary information and providers be transparent about data collection and sharing practices. This information is important for dealers who advertise on mobile sites or who have their own smart phone app.

The FTC released a statement on Sept. 13, reaffirming its focus on enforcing the Fair Credit Reporting Act. That suggests more enforcement action on illegal sharing of personal information and illegal use of credit scores. Dealers should have their counsel review all contracts that allow vendors access to their DMS, and any vendor that provides list of customers based on their credit profile.

C O N T I N U E D F RO M PAG E 1 2

NIADA LEGISLATIVE TEAM UPDATE

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16


D O N ’ T B E T H E O N E O N T H E S I D E L I N E WAT C H I N G E V E RYO N E PA S S YO U BY

SUBPRIME IS ON THE RISE$FFRUGLQJ�WR�([SHULDQ��FDU�ORDQ�GHOLQTXHQFLHV�IHOO�LQ�WKH�¿UVW�TXDUWHU�RI��IRU�WKH�¿UVW�WLPH�LQ�WKUHH�\HDUV��'HIDXOW�UDWHV�GURSSHG�E\�

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many years.6LQFH�WKH�FUHGLW�FULVLV��PLOOLRQV�RI�SHRSOH�ZKR�XVHG�WR�KDYH�JRRG�FUHGLW�QRZ�IDOO�LQWR�WKH�VXESULPH�FDWHJRU\��:KLOH�WKDW¶V�D�GLVFRXUDJLQJ�

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DXWRPRELOHV�DQG�RQO\�QHHG�WR�EH�HGXFDWHG�RQ�WKHLU�FXUUHQW�VLWXDWLRQ�DQG�ZKDW�WKH\�FDQ�GR�WR�LPSURYH�$Q�DXWR�ORDQ�IRU�EDG�FUHGLW�LV�WKH�ULJKW�SDWK�WR�WDNH�WR�LPSURYH�WKHLU�FUHGLW�VLWXDWLRQ��%H�WKH�RQH�ZKR�KHOSV�LPSURYH�RXU�QDWLRQDO�

HFRQRPLF�FULVLV��'RQ¶W�EH�WKH�RQH�RQ�WKH�VLGHOLQH�ZDWFKLQJ�HYHU\RQH�SDVV�\RX�E\�

BY DANI LUNSFORD NATIONAL SALES AND MARKETING EXECUTIVE WITH SHOWCASE PUBLICATIONS, INC. SHE HAS BEEN IN THE RETAIL AUTOMOTIVE INDUSTRY FOR 14 YEARS, WORKING IN SALES, SERVICE, E-COMMERCE MANAGEMENT AND AS A CONSULTANT TO IT COMPANIES AND DEALER GROUPS. SHE CAN BE REACHED AT [email protected].

AU T O S H OW

NORTHWOOD UNIVERSITY’S 2012 AUTO SHOW DRIVES THE DREAM1RUWKZRRG�8QLYHUVLW\�KHOG�LWV��,QWHUQDWLRQDO�$XWR�6KRZ�RQ�2FWREHU��GUDZLQJ�PRUH�WKDQ�

��SHRSOH�WR�WKH�1RUWKZRRG�FDPSXV�LQ�0LGODQG��0LFK�7KH�WKUHH�GD\�HYHQW��LQ�LWV��WK�\HDU��SURYLGHG�D�OHDUQLQJ�H[SHULHQFH�IRU�VWXGHQWV�DV�ZHOO�DV�WKH�

RSSRUWXQLW\�IRU�YLVLWRUV�WR�LQWHUDFW��YLHZ�DQG�EHFRPH�HGXFDWHG�DERXW�WKH�PRUH�WKDQ��SURGXFW�RIIHULQJV�SUHVHQWHG�E\��VWXGHQWV�RI�DOO�PDMRUV�DW�1RUWKZRRG�8QLYHUVLW\��$V�DOZD\V��VWXGHQWV�SODQQHG��RUJDQL]HG��H[HFXWHG�DQG�ZRUNHG�WKH�VKRZ�³'HVSLWH�WKH�RQ�DQG�RII�UDLQ\�ZHDWKHU�WKURXJKRXW�WKH�ZHHNHQG��DWWHQGDQFH�WR�WKH�DXWR�VKRZ�ZDV�

VWHDG\�DV�SHRSOH�EXQGOHG�XS�DQG�HQMR\HG�WKH�VKRZ�UHJDUGOHVV�´�DXWR�VKRZ�JHQHUDO�FKDLU�3DWULFN�Faber said.'U��7LPRWK\�1DVK��1RUWKZRRG¶V�YLFH�SUHVLGHQW�IRU�VWUDWHJLF�DQG�FRUSRUDWH�DOOLDQFHV��HVWLPDWHG�

WKH�VKRZ¶V�HFRQRPLF�LPSDFW�WR�WKH�0LGODQG�DUHD�DW��PLOOLRQ��PLOOLRQ��

FOR MORE INFORMATION, CALL (989) 837-4823 OR EMAIL [email protected].

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C R E AT I N G Q R C O D E S FO R TA RG E T C O N S U M E R S L E T S YO U

C O N N E C T AU T O S H O P P E R S W I T H YO U R D E A L E R S H I P A N D

W I T H T H E M U LT I M E D I A C O N T E N T O F YO U R C H O I C E .

QR CODE ADVERTISING: The Next Big ThingThe era of the used car dealer is

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have salesmen standing at points on WKH�XVHG�FDU�ORW��1RZ�ZH�KDYH�ZLQGRZ�VWLFNHUV�WKDW�ZLOO�LQWHUDFW�ZLWK�D�SRWHQWLDO�customer’s cell phone to give him more LQIRUPDWLRQ�WKDQ�D�VDOHVPDQ�ZRXOG�RU�even could have.:LWK�WKH�UDSLG�JURZWK�RI�VPDUW�

SKRQHV��WKH�IDFHV�RI�WKH�GHDOHUVKLS�KDYH�EHFRPH�FRPSXWHU�HQDEOHG�ZHE�SDJHV��chat sessions and codes that link you and your customer together.

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PRELOH�WHFKQRORJ\�¿UP�1HOO\PRVHU��45�codes are spurring consumers to take DFWLRQ�ZLWK�KLJKHU�UHVSRQVH�UDWHV�WKDQ�other direct marketing tactics.7KH�UHSRUW��³6FDQ�5HVSRQVH�5DWHV�

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average user returned for an additional YLVLW��DFWXDOO\��DGGLWLRQDO�YLVLWV��RQ�DYHUDJH��³7KH�ELJ�QHZV�LV�WKDW�45�VW\OH�PRELOH�

codes get higher response rates than RWKHU�SULQWHG�GLUHFW�PDUNHWLQJ�WRROV�´�1HOO\PRVHU�H[HFXWLYH�YLFH�SUHVLGHQW�Roger Matus said.6R�ZKDW�GRHV�WKDW�PHDQ�IRU�\RXU�

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FRGH�ZLWK�D�PRELOH�SKRQH��WKH\�DUH�immediately redirected to the vehicle’s PRELOH�SDJH��7KDW�QHZ�IHDWXUH�FDQ�FRQYHUW�DIWHU�KRXUV�ORW�ZDONHUV�DQG�ZLQGRZ�VKRSSHUV�LQWR�VROLG�OHDGV�HYHQ�ZKLOH�\RXU�VKRZURRP�LV�FORVHG�$FFRUGLQJ�WR�&RPVFRUH�FRP��MXVW�RYHU�

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information as you can to shoppers puts you heads above your competition.

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mobile device in hand has the potential WR�EH�DFWLYHO\�HQJDJHG�ZLWK�DQ\�FRQWHQW�you have supplied.

The results of the report suggest car dealerships should consider adding QR codes or other mobile action codes WR�WKHLU�SULQW�FDPSDLJQV�DQG�ZLQGRZ�VWLFNHUV�ZKHQ�WKH\¶UH�ORRNLQJ�WR�GULYH�D�VSHFL¿F�DFWLRQ�³:KHQ�GRQH�ZHOO�´�0DWXV�VDLG��

“mobile action codes can turn a print advertising campaign into a direct PDUNHWLQJ�WRRO�ZLWK�D�KLJKHU�WKDQ�average response rate.”3HRSOH�JHW�H[FLWHG�DERXW�45�FRGHV��

They understand they can gather information and store it to use at a later WLPH��DQG�DUH�VFDQQLQJ�DW�KLJKHU�UDWHV�WKDQ�HYHU��,W�LV�QRW�HQRXJK�WR�MXVW�SXW�D�45�FRGH�RQ�D�ZLQGRZ�VWLFNHU�RU�D�SULQW�DG��<RX�PXVW�DOVR�IRFXV�RQ�WKH�PRELOH�H[SHULHQFH�WKDW�\RX¶UH�SURYLGLQJ�WR�WKH�VPDUWSKRQH�ZLHOGLQJ�DXGLHQFH��7KH�WH[W�DURXQG�WKH�45�FRGH�VKRXOG�

encourage the recipient to scan the code DQG�IROORZ�VRPH�VLPSOH�VXJJHVWLRQV��*LYLQJ�WKH�VFDQQHU�D�UHDVRQ�WR�VFDQ�LV�DOVR�D�ELJ�KLW��VXFK�DV�³VFDQ�WKH�FRGH�WR�VHH�VHUYLFH�VSHFLDOV�´�RU�³VFDQ�WKH�FRGH�for all vehicle details.”7KLV�VLPSOH��LQH[SHQVLYH�WRRO�FDQ�

help you build your “virtual dealership” DQG�KHOS�\RX�FRQQHFW�ZLWK�FXVWRPHUV�WKURXJK�D�ZHE�EDVHG�SRUWDO�

BY DANI LUNSFORDDANI LUNSFORD IS A NATIONAL SALES AND MARKETING EXECUTIVE WITH SHOWCASE PUBLICATIONS, INC. SHE HAS BEEN IN THE RETAIL AUTOMOTIVE INDUSTRY FOR 14 YEARS, WORKING IN SALES, SERVICE, E-COMMERCE MANAGEMENT AND AS A CONSULTANT TO IT COMPANIES AND DEALER GROUPS. SHE CAN BE REACHED AT [email protected].

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20


DSC Joins as Platinum Partner'HDOHU�6HUYLFHV�&RUSRUDWLRQ�KDV�MRLQHG�1,$'$�DV�D�3ODWLQXP�OHYHO�

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inventory and create more sales opportunities. DSC’s additional SURGXFWV�OLNH�&ROODWHUDO�3URWHFWLRQ�DQG�/HQGHU�$FFHVV�FUHDWH�D�GHHSHU�DQG�PRUH�FRQVLVWHQW�SUR¿W�PDUJLQ�ZKHQ�LQWHJUDWHG�LQWR�GHDOHUVKLS�operations. '6&�VKRZV�LWV�FRPPLWPHQW�WR�LWV�FXVWRPHUV�E\�FRPELQLQJ�ORFDO�VDOHV�

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FOR MORE INFORMATION, VISIT WWW.DISCOVERDSC.COM, CALL 1-888-969-3721 OR EMAIL [email protected].

PLATINUMNATIONAL CORPORATE PARTNER

I N T E R AC T I V E M A R K E T I N G

DealerTrack Acquires ClickMotive'HDOHU7UDFN�KDV�DQQRXQFHG�WKH�DFTXLVLWLRQ�

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FOR MORE INFORMATION ON DEALERTRACK, VISIT WWW.DEALERTRACK.COM.

Chinese-made counterfeit airbags have been used as replacement SDUWV�IRU�DV�PDQ\�DV��XVHG�YHKLFOHV�WKDW�KDYH�EHHQ�LQYROYHG�LQ�D�FUDVK�RYHU�WKH�SDVW�WKUHH�\HDUV��WKH�1DWLRQDO�+LJKZD\�7UDI¿F�6DIHW\�$GPLQLVWUDWLRQ�ZDUQHG�7KH�1+76$¶V�WHVWV�VKRZHG�WKH�EODFN�PDUNHW�IDNH�DLUEDJV��ZKLFK�ORRN�

OLNH�FHUWL¿HG�RULJLQDO�HTXLSPHQW�SDUWV�ULJKW�GRZQ�WR�WKH�PDQXIDFWXUHU¶V�ORJR��HLWKHU�GRQ¶W�GHSOR\�DW�DOO�RQ�LPSDFW�RU�H[SORGH��VHQGLQJ�¿HU\�VKUDSQHO�WRZDUG�WKH�GULYHU¶V�IDFH�

The airbags are being sold to independent repair shops as original HTXLSPHQW��WKH�1+76$�VDLG��7KH�DJHQF\�KDV�FRPSLOHG�D�OLVW�RI�PDNHV�DQG�PRGHOV�IRU�ZKLFK�WKH�FRXQWHUIHLW�DLUEDJV�DUH�NQRZQ�WR�H[LVW��EXW�DGPLWWHG�LW�GRHV�QRW�\HW�NQRZ�WKH�³IXOO�VFRSH�DQG�VFDOH�RI�WKH�SUREOHP´�DQG�VDLG�WKH�OLVW�LV�OLNHO\�WR�³HYROYH�RYHU�WLPH�´�7KH�OLVW�LV�DYDLODEOH�DW�ZZZ�VDIHUFDU�JRY�

Cars that have had their airbags replaced by independent shops or E\�DLUEDJV�SXUFKDVHG�RQOLQH�GXULQJ�WKH�SDVW�WKUHH�\HDUV�DUH�DW�ULVN��WKH�1+76$�VDLG��2ZQHUV�RI�VXFK�YHKLFOHV�DUH�DVNHG�WR�FRQWDFW�WKH�FDOO�FHQWHU�established by their car’s manufacturer to have the vehicle inspected and the airbag replaced if necessary. The list of call centers and other LQIRUPDWLRQ�LV�DOVR�DYDLODEOH�DW�ZZZ�VDIHUFDU�JRY�,Q�$XJXVW��IHGHUDO�DJHQWV�DUUHVWHG�D�1RUWK�&DUROLQD�DXWR�PHFKDQLF�

DQG�GLVFRYHUHG�PRUH�WKDQ��FRXQWHUIHLW�DLUEDJV��DFFRUGLQJ�WR�YDULRXV�PHGLD�UHSRUWV��7KH�FDVH�ZDV�UHSRUWHGO\�OLQNHG�WR�D�FDVH�ODVW�\HDU�LQ�7HQQHVVHH��LQ�ZKLFK�D�&KLQHVH�FLWL]HQ�SOHDGHG�JXLOW\�WR�WUDI¿FNLQJ�LQ�FRXQWHUIHLW�DLUEDJV�DQG�ZDV�VHQWHQFHG�WR��PRQWKV�LQ�SULVRQ�7KH�1+76$�VDLG�QR�GHDWKV�RU�LQMXULHV�KDYH�EHHQ�WLHG�WR�WKH�FRXQWHUIHLW�

EDJV�EXW�VDLG�LW�LV�XQFOHDU�ZKHWKHU�SROLFH�DFFLGHQW�LQYHVWLJDWRUV�ZRXOG�EH�DEOH�WR�LGHQWLI\�D�IDNH�DLUEDJ�IURP�D�UHDO�RQH�DIWHU�D�ZUHFN��

WA R N I N G

NHTSA Warns of Counterfeit Airbags

Carolina_1212.indd 20 11/16/12 10:51 AM

I N T E R AC T I V E M A R K E T I N G

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A DV E R T O R I A L

INDEPENDENT DEALERS NEED NEW ‘F&I MANAGER’

Having had the pleasure of serving automobile dealers for more than 50 years, we at 3URWHFWLYH�$VVHW�3URWHFWLRQ�DUH�FRPPLWWHG�WR�PHHWLQJ�WKH�¿QDQFH�DQG�LQVXUDQFH�QHHGV�of our dealer customers.

Like many readers of this magazine, we place great importance on industry studies to ensure we are on top of the latest market trends – and in particular, your needs. However, we recognize selling cars is more than numbers and charts. It’s a people business.

We spend countless hours working to support dealers of all sizes and types. We’re in the car business and a lot of what we do still takes place with a meeting, a handshake, leadership and good in-store training.0RUH�WKDQ�¿YH�GHFDGHV�RI�H[SHULHQFH�DQG�GRLQJ�EXVLQHVV�WKH�ROG�IDVKLRQHG�ZD\�KDV�

SRVLWLRQHG�3URWHFWLYH�WR�H[FHHG�WKH�H[SHFWDWLRQV�RI�RXU�GHDOHU�FXVWRPHUV�In our goal to share proven dealer solutions, we turned to the largest audience – the

growing group of independent auto dealers. We wanted to better understand what you UHDOO\�QHHG�WR�KHOS�IXUWKHU�GULYH�\RXU�),�VDOHV�DQG�SUR¿WV�

We asked many of you from across the county questions about your operations, current selling processes and the importance of F&I to your businesses. Your feedback was informative and insightful, and aligned with many of the current successful approaches we use today.

Here is a snapshot of what we learned: When we inquired about the types of vehicles and service contracts being sold

today, we learned the average vehicle sold is 3-7 years old with 50,000-100,000 miles on it. We discovered more than 65 percent of you sell vehicle service contracts in your dealership.

When we inquired how Protective could better support you, we learned that ease of doing business is very important, followed by working with a company you can trust. On the technology front, 55 percent of you use or plan to use an electronic device such as an iPad® or a tablet device to educate your current and future consumers about F&I products.

We found that in general, consumers still rely on good, quality education from you to learn about the value of a service contract and most consumers don’t have preconceived ideas about what that value really offers them.

The study reinforces what Protective Asset Protection already does well: helping dealers make money selling F&I products.

So what is the best way to help you be more productive, drive more revenue and increase customer retention within the F&I process?

We think the answer is obvious – hire an F&I manager. No one said it was a simple VROXWLRQ��%XW�DQ�H[SHULHQFHG�),�PDQDJHU�EULQJV�WKH�NQRZOHGJH�DQG�VNLOOV�WR�SURYLGH�customers with the best options and the true value of making an F&I purchase decision.

Obviously, adding to your headcount is no small task, and we asked ourselves what ZH�FRXOG�GR��6R�ZH�GHFLGHG�WR�³¿OO´�\RXU�),�SRVLWLRQ�IRU�\RX�

Okay, we didn’t hire an F&I manager for each independent dealer. Instead, we FUHDWHG�³WKH�PDQDJHU�´�%\�FRPELQLQJ�\RXU�FULWLFDO�),�QHHGV�ZLWK�RXU��\HDUV�RI�H[SHULHQFH��ZH�EXLOW�3URWHFWLYH¶V�3URWHFWLRQ�3OXV�6ROXWLRQ��GHVLJQHG�H[FOXVLYHO\�IRU�\RX�

You might have guessed your new F&I manager is not actually a person but instead is an electronic sales presentation using an iPad, or a desktop/laptop-based solution.:KLOH�RXU�QHZ�VWUDWHJ\�PLJKW�QRW�UHSODFH�DQ�H[SHULHQFHG�),�PDQDJHU¶V�NQRZ�KRZ�

and sales ability, it does provide you a tool to increase service contract sales. With our new F&I solution, you have the ability to offer a vehicle service contract customized WR�WKH�VSHFL¿F�QHHGV�RI�\RXU�FXVWRPHU��DOO�ZLWK�HDV\�WR�XVH�WHFKQRORJ\�GHVLJQHG�WR�overcome objections and help close the sale.

We want you to have the closest thing we could provide to an actual F&I manager. Protective’s Protection Plus vehicle service contract and supporting web/iPad app will SURYLGH�\RX�DQG�\RXU�GHDOHUVKLS�ZLWK�WKH�QH[W�EHVW�WKLQJ�3URWHFWLYH�$VVHW�3URWHFWLRQ�ORRNV�IRUZDUG�WR�H[SDQGLQJ�RXU�QDWLRQZLGH�UHDFK�DQG�

working with independent dealers to introduce them to their new F&I manager. You can learn more about the technology and our goal to bring you innovative new ideas and SUR¿W�JURZWK�VWUDWHJLHV�E\�YLVLWLQJ�ZZZ�QHZIDQGLPDQDJHU�FRP��

BY RICK KURTZSENIOR VICE PRESIDENT-DEALER SERVICES FOR PROTECTIVE ASSET PROTECTION HAS MORE THAN 23 YEARS OF INDUSTRY EXPERIENCE. PROTECTIVE ASSET PROTECTION PROVIDES F&I PRODUCTS FOCUSED ON ENHANCING PROFITABILITY AND CUSTOMER SATISFACTION. FOR MORE INFORMATION, CALL 800-950-6060, EXT. 5755, EMAIL [email protected] OR VISIT PROTECTIVEASSETPROTECTION.COM.

:KLOH�WKH�1DWLRQDO�,QVXUDQFH�&ULPH�%XUHDX��1,&%��ZDUQHG�RI�WKH�SRWHQWLDO�for fraud regarding vehicles affected by +XUULFDQH�6DQG\��7KH�$VVRFLDWHG�3UHVV�reported the dire predictions of hundreds RI�WKRXVDQGV�RI�ÀRRG�GDPDJHG�YHKLFOHV�ZDV�ZD\�RII�WKH�PDUN�

According to insurance claim data UHYLHZHG�E\�$3��DERXW��FODLPV�KDYH�EHHQ�UHFHLYHG�E\�¿YH�PDMRU�LQVXUDQFH�FDUULHUV�LQ�WKH�DUHD��IDU�IHZHU�WKDQ�H[SHFWHG�

Early estimates predicted the storm WKDW�KLW�WKH�GHQVHO\�SRSXODWHG�1RUWKHDVW�to result in more damaged cars than the ��DIIHFWHG�E\�+XUULFDQH�.DWULQD��ZKLFK�KLW�WKH�*XOI�&RDVW�LQ��1$'$�VHQLRU�DQDO\VW�/DUU\�'L[RQ�VDLG�DV�PDQ\�DV��YHKLFOHV�FRXOG�HQG�XS�VFUDSSHG�because of the storm.%XW�WKDW�DSSDUHQWO\�LV�QRW�WKH�FDVH��

VDLG�)UDQN�6FD¿GL��D�VSRNHVPDQ�IRU�WKH�1DWLRQDO�,QVXUDQFH�&ULPH�%XUHDX��DQ�insurance company group that monitors fraud and other trends. He said insurers ZDWFKHG�E\�KLV�JURXS�DUH�ORJJLQJ�IDU�IHZHU�FODLPV�WKDQ�WKH\�GLG�ZLWK�.DWULQD�

“It doesn’t translate to there’s going to EH��FDUV�RXW�RI�WKLV�WKLQJ�MXVW�because this is such a huge geographic VWRUP�´�KH�WROG�$3�(YHQ�LI�WKHUH�DUH�IHZHU�WKDQ�H[SHFWHG��

WKHUH�DUH�OLNHO\�WR�EH�PRUH�ÀRRG�GDPDJHG�YHKLFOHV�RQ�WKH�PDUNHW�WKDQ�QRUPDO��DQG�PDQ\�ZRQ¶W�EH�ODEHOHG�DV�VXFK�ZKHQ� WKH\�DUH�VROG�LQ�WKH�ZKROHVDOH�RU�UHWDLO�markets.³8QVFUXSXORXV�VDOYDJH�RSHUDWRUV�DQG�

dealers often try to conceal from potential buyers the fact that vehicles have been GDPDJHG�E\�D�QDWXUDO�GLVDVWHU�´�1,&%�SUHVLGHQW�DQG�&(2�-RH�:HKUOH�VDLG�$IWHU�.DWULQD��1,&%�HVWDEOLVKHG�

9,1&KHFN��D�IUHH�VHUYLFH�WKDW�DOORZV�individuals to check if a vehicle has ever EHHQ�GHFODUHG�DV�VDOYDJH�E\�RQH�RI�1,&%¶V�PHPEHU�LQVXUDQFH�FRPSDQLHV��9,1&KHFN�LV�DYDLODEOH�DW�ZZZ�QLFE�RUJ��

I N D U S T RY N E W S

Sandy Not as Hard on Vehicles as Expected

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24


Congress enacted the federal Bankruptcy &RGH�LQ��DQG�LW�KDV�EHHQ�DPHQGHG�several times since. The procedural aspects are governed by bankruptcy rules and the ORFDO�UXOHV�RI�HDFK�EDQNUXSWF\��%.��FRXUW��7KHUH�DUH��%.�FRXUWV�±�RQH�LQ�HYHU\�IHGHUDO�MXGLFLDO�GLVWULFW�LQ�WKH�FRXQWU\�7KH�FRXUW�RI¿FLDO�ZLWK�WKH�GHFLVLRQ�

PDNLQJ�SRZHU�LQ�HDFK�GLVWULFW�LV�D�8QLWHG�6WDWHV�EDQNUXSWF\�MXGJH��0XFK�RI�%.�process is administrative and conducted DZD\�IURP�WKH�FRXUWKRXVH��,Q�&KDSWHU�� DQG��FDVHV��WKH�RQHV�WKDW�DIIHFW�GHDOHUV�DQG�OLHQ�KROGHUV��WKH�SURFHVV�LV�FDUULHG�RXW�by a trustee.

What’s the Difference?The consumer bankruptcies that affect you

PRVW�ZLOO�EH�¿OHG�DV�&KDSWHU��RU�&KDSWHU��Chapter 7 – liquidation: A chapter

��FDVH�GRHV�QRW�LQYROYH�WKH�¿OLQJ�RI�D�SODQ�

RI�UHSD\PHQW��DV�LQ�FKDSWHU��,QVWHDG��the trustee gathers and sells the debtor’s QRQH[HPSW�DVVHWV�DQG�XVHV�WKH�SURFHHGV�WR�SD\�KROGHUV�RI�FODLPV��FUHGLWRUV��LQ�DFFRUGDQFH�ZLWK�WKH�SURYLVLRQV�RI�WKH�Bankruptcy Code.

Chapter 13 – wage earner plan: &KDSWHU��RIIHUV�LQGLYLGXDOV�D�QXPEHU�RI�DGYDQWDJHV�RYHU�&KDSWHU��OLTXLGDWLRQ��including an opportunity to save their homes from foreclosure.%\�¿OLQJ�XQGHU�&KDSWHU��LQGLYLGXDOV�

can stop foreclosure proceedings and PD\�FXUH�GHOLQTXHQW�PRUWJDJH�SD\PHQWV�RYHU�WLPH��WKRXJK�WKH\�PXVW�VWLOO�PDNH�DOO�mortgage payments that come due during WKH�&KDSWHU��SODQ�RQ�WLPH�&KDSWHU��DOORZV�LQGLYLGXDOV�WR�

UHVFKHGXOH�VHFXUHG�GHEWV��RWKHU�WKDQ�D�PRUWJDJH�IRU�WKHLU�SULPDU\�UHVLGHQFH��DQG�

H[WHQG�WKHP�RYHU�WKH�OLIH�RI�WKH�SODQ��7KDW�FRXOG�ORZHU�WKH�SD\PHQWV��&KDSWHU��also has a special provision that protects WKLUG�SDUWLHV�ZKR�DUH�OLDEOH�ZLWK�WKH�GHEWRU�RQ�³FRQVXPHU�GHEWV�´�D�SURYLVLRQ�than can protect co-signers.&KDSWHU��DFWV�OLNH�D�FRQVROLGDWLRQ�

ORDQ�XQGHU�ZKLFK�WKH�LQGLYLGXDO�PDNHV�SD\PHQWV�WR�D�WUXVWHH��ZKR�WKHQ�distributes payments to creditors. $Q\�LQGLYLGXDO��HYHQ�LI�VHOI�HPSOR\HG�

RU�RSHUDWLQJ�DQ�XQLQFRUSRUDWHG�EXVLQHVV��LV�HOLJLEOH�IRU�&KDSWHU��UHOLHI�DV�ORQJ�DV�the individual’s unsecured debts are less WKDQ��DQG�VHFXUHG�GHEWV�DUH�OHVV�WKDQ��$�FRUSRUDWLRQ�RU�SDUWQHUVKLS�FDQQRW�EH�D�&KDSWHU��GHEWRU�

How Chapter 13 Works $�&KDSWHU��FDVH�EHJLQV�E\�¿OLQJ�

D�SHWLWLRQ�ZLWK�WKH�EDQNUXSWF\�FRXUW�

Understanding Your Customer’s Chapter 13 BankruptcyT H E F I R S T O F A T H R E E - PA R T S E R I E S O N T H E B A S I C S O F B A N K R U P T C Y P RO C E D U R E S A N D W H AT I T M E A N S T O D E A L E R S / L I E N H O L D E R S .

MONEY MATTERS

Carolina_1212.indd 24 11/16/12 10:51 AM


25


VHUYLQJ�WKH�DUHD�ZKHUH�WKH�GHEWRU�KDV�D�UHVLGHQFH��8QOHVV�WKH�FRXUW�RUGHUV�RWKHUZLVH��WKH�GHEWRU�PXVW�DOVR�¿OH�VFKHGXOHV�RI�DVVHWV�DQG�OLDELOLWLHV��a schedule of current income and H[SHQGLWXUHV��D�VFKHGXOH�RI�FRQWUDFWV�DQG�XQH[SLUHG�OHDVHV��DQG�D�VWDWHPHQW�RI�¿QDQFLDO�DIIDLUV�:KHQ�DQ�LQGLYLGXDO�¿OHV�D�&KDSWHU��

SHWLWLRQ��DQ�LPSDUWLDO�WUXVWHH�LV�DSSRLQWHG�to evaluate the case and serve as a GLVEXUVLQJ�DJHQW��FROOHFWLQJ�SD\PHQWV�from the debtor and making distributions to creditors. The bankruptcy clerk gives notice of the bankruptcy case to all FUHGLWRUV�ZKRVH�QDPHV�DQG�DGGUHVVHV�DUH�provided by the debtor.%HWZHHQ��DQG��GD\V�DIWHU�WKH�

GHEWRU�¿OHV�WKH�SHWLWLRQ��WKH�WUXVWHH�ZLOO�KROG�D�PHHWLQJ�RI�FUHGLWRUV��7KH�GHEWRU��WKH�WUXVWHH�DQG�WKRVH�FUHGLWRUV�ZKR�ZLVK�WR�DWWHQG�ZLOO�WKHQ�FRPH�WR�FRXUW�IRU�D�hearing on the repayment plan.7KH�GHEWRU�PXVW�¿OH�D�UHSD\PHQW�SODQ�

ZLWK�WKH�SHWLWLRQ�RU�ZLWKLQ��GD\V�DIWHU�WKH�SHWLWLRQ�LV�¿OHG��7KH�SODQ�PXVW�EH�submitted for court approval and must SURYLGH�IRU�SD\PHQWV�RI�¿[HG�DPRXQWV�WR�WKH�WUXVWHH�RQ�D�UHJXODU�EDVLV��W\SLFDOO\�ELZHHNO\�RU�PRQWKO\��7KH�WUXVWHH�then distributes the funds to creditors DFFRUGLQJ�WR�WKH�WHUPV�RI�WKH�SODQ��ZKLFK�can offer creditors less than full payment on their claims.,I�WKH�GHEWRU�ZDQWV�WR�NHHS�WKH�

FROODWHUDO�VHFXULQJ�D�SDUWLFXODU�FODLP��WKH�plan must provide that the holder of the secured claim receive at least the value of the collateral. If the obligation underlying WKH�VHFXUHG�FODLP�ZDV�XVHG�WR�EX\�WKH�collateral – such as a car loan – and the GHEW�ZDV�LQFXUUHG�ZLWKLQ�FHUWDLQ�WLPH�IUDPHV�EHIRUH�WKH�EDQNUXSWF\�¿OLQJ��WKH�plan must provide for full payment of the GHEW��QRW�MXVW�WKH�YDOXH�RI�WKH�FROODWHUDO�,I�WKH�FRXUW�FRQ¿UPV�WKH�SODQ��WKH�

WUXVWHH�ZLOO�GLVWULEXWH�IXQGV�UHFHLYHG�under the plan “as soon as is practicable.”

Making the Plan Work2QFH�WKH�FRXUW�FRQ¿UPV�WKH�SODQ��

the debtor must make the plan succeed by making regular payments to the trustee either directly or through payroll GHGXFWLRQ��ZKLFK�UHTXLUHV�OLYLQJ�RQ�D�¿[HG�EXGJHW�IRU�D�SURORQJHG�SHULRG��:KLOH�FRQ¿UPDWLRQ�RI�WKH�SODQ�HQWLWOHV�WKH�GHEWRU�to retain property as long as payments are PDGH��WKH�GHEWRU�FDQQRW�LQFXU�QHZ�GHEW�ZLWKRXW�FRQVXOWLQJ�WKH�WUXVWHH��

1H[W��7KH�EDVLFV�RI�&KDSWHU��¿OLQJV��

1RWH��7KH�LQIRUPDWLRQ�SUHVHQWHG�VKRXOG�QRW�EH�FLWHG�RU�UHOLHG�XSRQ�DV�³OHJDO�DXWKRULW\´�DQG�VKRXOG�QRW�EH�XVHG�DV�D�VXEVWLWXWH�IRU�UHIHUHQFH�WR�WKH�8�6��%DQNUXSWF\�&RGH�DQG�WKH�)HGHUDO�5XOHV�RI�%DQNUXSWF\�3URFHGXUH��

BY ROD HEASLEY ROD HEASLEY IS EXECUTIVE VICE PRESIDENT OF PERITUS PORTFOLIO SERVICES , A SOUTHLAKE, TEXAS-BASED SPECIALTY FINANCE COMPANY THAT SPECIALIZES IN THE PURCHASING OF OPEN BANKRUPTCY ACCOUNTS.

“:KHQ�DQ�LQGLYLGXDO�¿OHV�D�&KDSWHU��SHWLWLRQ��DQ�LPSDUWLDO�WUXVWHH�LV�DSSRLQWHG�WR�HYDOXDWH�WKH�FDVH�DQG�VHUYH�DV�D�GLVEXUVLQJ�DJHQW��FROOHFWLQJ�SD\PHQWV�IURP�WKH�GHEWRU�DQG�PDNLQJ�GLVWULEXWLRQV�WR�FUHGLWRUV�

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26


$�FKDSWHU��EDQNUXSWF\�FDVH�GRHV�QRW�LQYROYH�WKH�¿OLQJ�RI�D�SODQ�RI�UHSD\PHQW�DV�LQ�FKDSWHU��,QVWHDG��WKH�EDQNUXSWF\�trustee gathers and sells the debtor’s QRQH[HPSW�DVVHWV�DQG�XVHV�WKH�SURFHHGV�WR�SD\�KROGHUV�RI�FODLPV��FUHGLWRUV��LQ�DFFRUGDQFH�ZLWK�WKH�SURYLVLRQV�RI�WKH�Bankruptcy Code.7R�TXDOLI\�IRU�UHOLHI�XQGHU�FKDSWHU��RI�

WKH�%DQNUXSWF\�&RGH��WKH�GHEWRU�FDQ�EH�DQ�LQGLYLGXDO��D�SDUWQHUVKLS��RU�D�FRUSRUDWLRQ�RU�RWKHU�EXVLQHVV�HQWLW\��6XEMHFW�WR�WKH�PHDQV�WHVW�IRU�LQGLYLGXDO�GHEWRUV��UHOLHI�LV�DYDLODEOH�XQGHU�FKDSWHU��UHJDUGOHVV�RI�WKH�DPRXQW�RI�WKH�GHEWRU¶V�GHEWV�RU�ZKHWKHU�WKH�debtor is solvent.

The debtor has no liability for GLVFKDUJHG�GHEWV��,Q�D�FKDSWHU��FDVH��KRZHYHU��D�GLVFKDUJH�LV�RQO\�DYDLODEOH�WR�LQGLYLGXDO�GHEWRUV��QRW�WR�SDUWQHUVKLSV�RU�

FRUSRUDWLRQV��:KLOH�DQ�LQGLYLGXDO�FKDSWHU��FDVH�XVXDOO\�UHVXOWV�LQ�D�GLVFKDUJH�RI�GHEWV��WKH�ULJKW�WR�D�GLVFKDUJH�LV�QRW�DEVROXWH��DQG�some types of debts are not discharged.

How Chapter 7 Works$�FKDSWHU��FDVH�EHJLQV�ZLWK�WKH�GHEWRU�

¿OLQJ�D�SHWLWLRQ�ZLWK�WKH�EDQNUXSWF\�FRXUW�VHUYLQJ�WKH�DUHD�ZKHUH�WKH�LQGLYLGXDO�OLYHV��7KH�GHEWRU�PXVW�DOVR�¿OH�VFKHGXOHV�RI�DVVHWV�DQG�OLDELOLWLHV��D�VFKHGXOH�RI�FXUUHQW�LQFRPH�DQG�H[SHQGLWXUHV��D�VWDWHPHQW�RI�¿QDQFLDO�DIIDLUV��DQG�D�VFKHGXOH�RI�FRQWUDFWV�DQG�XQH[SLUHG�OHDVHV�7KH�GHEWRU�PXVW�DOVR�SURYLGH��$�OLVW�RI�DOO�FUHGLWRUV�DQG�WKH�DPRXQW�

and nature of their claims. ��7KH�VRXUFH��DPRXQW�DQG�IUHTXHQF\�RI�

the debtor’s income.��$�OLVW�RI�DOO�RI�WKH�GHEWRU¶V�SURSHUW\�

��$�GHWDLOHG�OLVW�RI�WKH�GHEWRU¶V�PRQWKO\�OLYLQJ�H[SHQVHV�±�IRRG��FORWKLQJ��VKHOWHU��XWLOLWLHV��WD[HV��WUDQVSRUWDWLRQ��PHGLFLQH��HWF�)LOLQJ�D�SHWLWLRQ�XQGHU�FKDSWHU��

DXWRPDWLFDOO\�³VWD\V´��VWRSV��PRVW�collection actions against the debtor or the GHEWRU¶V�SURSHUW\��,Q�VRPH�VLWXDWLRQV��WKH�stay is effective only for a short time. The VWD\�UHTXLUHV�QR�MXGLFLDO�DFWLRQ��$V�ORQJ�DV�WKH�VWD\�LV�LQ�HIIHFW��FUHGLWRUV�JHQHUDOO\�FDQQRW�LQLWLDWH�RU�FRQWLQXH�ODZVXLWV��ZDJH�garnishments or even telephone calls demanding payments.%HWZHHQ��DQG��GD\V�DIWHU�WKH�SHWLWLRQ�

LV�¿OHG��WKH�FDVH�WUXVWHH�ZLOO�KROG�D�PHHWLQJ�of creditors. The debtor must attend the PHHWLQJ�DQG�DQVZHU�TXHVWLRQV�UHJDUGLQJ�WKH�GHEWRU¶V�¿QDQFLDO�DIIDLUV�DQG�SURSHUW\�

The Ins and Outs of Chapter 7THE SECOND OF A THREE-PART SERIES ON THE BASICS OF BANKRUPTCY PROCEDURES AND WHAT IT MEANS TO DEALERS/LIEN HOLDERS.

CONTINUED ON NEXT PAGE

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27


Role of Trustee in Chapter 7 :KHQ�D�FKDSWHU��SHWLWLRQ�LV�¿OHG��WKH�8�6��

WUXVWHH��RU�WKH�EDQNUXSWF\�FRXUW�LQ�$ODEDPD�DQG�1RUWK�&DUROLQD��DSSRLQWV�DQ�LPSDUWLDO�case trustee to administer the case and OLTXLGDWH�WKH�GHEWRU¶V�QRQH[HPSW�DVVHWV�,Q�WKH�W\SLFDO�QR�DVVHW�FKDSWHU��FDVH��WKHUH�

LV�QR�QHHG�IRU�FUHGLWRUV�WR�¿OH�SURRIV�RI�FODLP�EHFDXVH�WKHUH�ZLOO�EH�QR�GLVWULEXWLRQ��,I�WKH�trustee later recovers assets for distribution WR�XQVHFXUHG�FUHGLWRUV��WKH�EDQNUXSWF\�FRXUW�ZLOO�SURYLGH�QRWLFH�WR�FUHGLWRUV�DQG�ZLOO�DOORZ�DGGLWLRQDO�WLPH�WR�¿OH�SURRIV�RI�FODLP�7KH�SULPDU\�UROH�RI�D�FKDSWHU��

WUXVWHH�LQ�DQ�DVVHW�FDVH�LV�WR�OLTXLGDWH�WKH�GHEWRU¶V�QRQH[HPSW�DVVHWV�LQ�D�PDQQHU�WKDW�PD[LPL]HV�WKH�UHWXUQ�WR�WKH�debtor’s unsecured creditors. The trustee accomplishes this by selling the debtor’s property if it is free and clear of liens.

Chapter 7 DischargeA discharge releases individual debtors

from personal liability for most debts DQG�SUHYHQWV�WKH�FUHGLWRUV�RZHG�WKRVH�GHEWV�from taking any collection actions against the

GHEWRU��%HFDXVH�D�FKDSWHU��GLVFKDUJH�LV�VXEMHFW�WR�PDQ\�H[FHSWLRQV��GHEWRUV�VKRXOG�consult competent legal counsel before ¿OLQJ�WR�GLVFXVV�WKH�VFRSH�RI�WKH�GLVFKDUJH�*HQHUDOO\��H[FOXGLQJ�FDVHV�WKDW�DUH�

GLVPLVVHG�RU�FRQYHUWHG��LQGLYLGXDO�GHEWRUV�UHFHLYH�D�GLVFKDUJH�LQ�PRUH�WKDQ��SHUFHQW�RI�FKDSWHU��FDVHV�,I�D�GHEWRU�ZLVKHV�WR�NHHS�FHUWDLQ�

VHFXUHG�SURSHUW\��VXFK�DV�DQ�DXWRPRELOH��KH�RU�VKH�PD\�GHFLGH�WR�³UHDI¿UP´�WKH�debt. That’s an agreement that the debtor ZLOO�UHPDLQ�OLDEOH�DQG�ZLOO�SD\�DOO�RU�D�SRUWLRQ�RI�WKH�PRQH\�RZHG��HYHQ�WKRXJK�WKH�GHEW�ZRXOG�RWKHUZLVH�EH�GLVFKDUJHG�LQ�WKH�EDQNUXSWF\��,Q�UHWXUQ��WKH�FUHGLWRU�promises not to repossess the automobile or other property so long as the debtor continues to pay the debt.7KH�GHEWRU�PXVW�UHDI¿UP�D�GHEW�EHIRUH�

WKH�GLVFKDUJH�LV�HQWHUHG��DQG�PXVW�VLJQ�D�ZULWWHQ�UHDI¿UPDWLRQ�DJUHHPHQW�DQG�¿OH�LW�ZLWK�WKH�FRXUW�

An individual receives a discharge for most of his or her debts in a chapter ��EDQNUXSWF\�FDVH��$�FUHGLWRU�PD\�QRW�

initiate or continue any legal or other action against the debtor to collect a discharged debt.<RXU�FXVWRPHU�KDV�WKUHH�RSWLRQV�LQ�D�

FKDSWHU��¿OLQJ��VXUUHQGHU�WKH�YHKLFOH��UHGHPSWLRQ�RU�UHDI¿UP�WKH�QRWH�:H�UHFRPPHQG�WKDW�ZKHQ�\RX�DV�WKH�

OLHQ�KROGHU�UHFHLYH�D�FKDSWHU��QRWLFH�RI�¿OLQJ��\RX�FDOO�WKH�FXVWRPHU¶V�DWWRUQH\�and ask the customer’s intention. That FRQYHUVDWLRQ�ZLOO�GLFWDWH�\RXU�QH[W�PRYH�prior to discharge.

Next: Your options when a customer ¿OHV�EDQNUXSWF\� 1RWH��7KH�LQIRUPDWLRQ�SUHVHQWHG�VKRXOG�QRW�EH�FLWHG�RU�UHOLHG�XSRQ�DV�³OHJDO�DXWKRULW\´�DQG�VKRXOG�QRW�EH�XVHG�DV�D�VXEVWLWXWH�IRU�UHIHUHQFH�WR�WKH�8�6��%DQNUXSWF\�&RGH�DQG�WKH�)HGHUDO�5XOHV�RI�%DQNUXSWF\�3URFHGXUH��

BY ROD HEASLEY ROD HEASLEY IS EXECUTIVE VICE PRESIDENT OF PERITUS PORTFOLIO SERVICES , A SOUTHLAKE, TEXAS-BASED SPECIALTY FINANCE COMPANY THAT SPECIALIZES IN THE PURCHASING OF OPEN BANKRUPTCY ACCOUNTS.

Carolina_1212.indd 27 11/16/12 10:51 AM

C I A D A DECEMBER 2012 w w w . t h e c i a d a . c o m

Outside Pool

Cabanas

Front Porch

Lazy River Lazy River

Water Slides

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ĐŽŵƉůĞƚĞ�ƐĐŚĞĚƵůĞ͘�

UPCOMING��PREͲLICENSING�CLASSES�

1Ͳ800Ͳ432Ͳ4232�NC�PREͲLICENSING�–�12�HR�

�ĞĐ�ϲͲϳ͕�ϮϬϭϮ� ,ĂƌƌŝƐďƵƌŐ�:ĂŶ�ϭϬͲϭϭ͕�ϮϬϭϯ� ,ĂƌƌŝƐďƵƌŐ�&Ğď�ϳͲϴ͕�ϮϬϭϯ� ZĂůĞŝŐŚ�DĂƌ�ϭϰͲϭϱ͕�ϮϬϭϯ� ZĂůĞŝŐŚ�

SC�PREͲLICENSING�–�8�HR��ĞĐ�ϭϯ͕�ϮϬϭϮ� >ĞǆŝŶŐƚŽŶ�:ĂŶ�ϭϳ͕�ϮϬϭϯ� >ĞǆŝŶŐƚŽŶ�&Ğď�Ϯϭ͕�ϮϬϭϯ� >ĞǆŝŶŐƚŽŶ�&Ğď�Ϯϳ͕�ϮϬϭϯ� &ůŽƌĞŶĐĞ�DĂƌ�ϭϮ͕�ϮϬϭϯ� >ĞǆŝŶŐƚŽŶ�

UPCOMING��NC�DEALER�CLASSES�1Ͳ800Ͳ432Ͳ4232�

NC�CONTINUING�EDUCATION�–�6�HR�ĞĐ�ϰ͕�ϮϬϭϮ� ,ĂƌƌŝƐďƵƌŐ��ĞĐ�ϭϵ͕�ϮϬϭϮ� <ĞŶůǇ�:ĂŶ�ϴ͕�ϮϬϭϯ� 'ƌĞĞŶƐďŽƌŽ�:ĂŶ�ϵ͕�ϮϬϭϯ� ,ĂƌƌŝƐďƵƌŐ�:ĂŶ�ϭϱ͕�ϮϬϭϯ� ,ĞŶĚĞƌƐŽŶǀŝůůĞ�:ĂŶ�ϭϲ͕�ϮϬϭϯ� <ĞŶůǇ�:ĂŶ�Ϯϯ͕�ϮϬϭϯ� ,ĂƌƌŝƐďƵƌŐ�&Ğď�ϲ͕�ϮϬϭϯ� ,ĂƌƌŝƐďƵƌŐ�&Ğď�ϭϵ͕�ϮϬϭϯ� ,ĂƌƌŝƐďƵƌŐ�&Ğď�ϮϬ͕�ϮϬϭϯ� <ĞŶůǇ�&Ğď�Ϯϲ͕�ϮϬϭϯ� 'ƌĞĞŶǀŝůůĞ�DĂƌ�ϭϯ͕�ϮϬϭϯ� ,ĂƌƌŝƐďƵƌŐ�DĂƌ�ϭϵ͕�ϮϬϭϯ� 'ƌĞĞŶƐďŽƌŽ�DĂƌ�ϮϬ͕�ϮϬϭϯ� <ĞŶůǇ�DĂƌ�Ϯϭ͕�ϮϬϭϯ� zŽƵŶŐƐǀŝůůĞ�

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VISIT WWW.THEHOMESTEAD.COM FOR ADDITIONAL INFORMATION ON THIS PROPERTY!

CIADA 58TH ANNUAL CONVENTION & EXPOAUGUST 1-4, 2013THE HOMESTEAD RESORT & SPA HOT SPRINGS, VIRGINIA

28

Carolina_1212.indd 28 11/16/12 10:53 AM


29


BACK OF CARD

Carolinas Independent Automobile Dealers

Association

VIPSponsors

Member Hotline: 1-800-432-4232

CHARLESTONAUTO AUCTION

MANHEIM - STATESVILLE

MENDENHALLAUTO AUCTION

ADESA-CHARLOTTE

MANHEIM NC KENLY

MANHEIM NC KENLY

CAROLINAAUTO AUCTION

MANHEIM -DARLINGTON

RAWLSAUTO AUCTION

GREENVILLEAUTO AUCTION

MID-STATEAUTO AUCTIONGREENSBOROAUTO AUCTION

SPARTANBURGAUTO AUCTION

SUMMERVILLEAUTO AUCTION

TIDEWATERAUTO AUCTION

TIDEWATERAUTO AUCTION

VIP CIADA MEMBER

ABC Company, Inc. 123 Main Street

Apple City, NC 28687 Dealer # 12345

Member # CC0829 Expiration: 10/01/09

EACH BLOCK IS GOOD FOR ONE BUY OR SELL FEE UP TO $100.00

FRONT OF CARD

Carolina_1212.indd 29 11/16/12 10:51 AM


30


BY CHIP ZYVOLOSKICHIP ZYVOLOSKI IS A SENIOR ATTORNEY FOR INDIRECT LENDING AT WOLTERS KLUWER FINANCIAL SERVICES. FOR MORE INFORMATION, VISIT WWW.WOLTERSKLUWERFS.COM/INDIRECT.

7KH�\HDU¶V�HQG�LV�D�WLPH�RI�UHÀHFWLRQ�:KHQ�LW�FRPHV�WR�DXWR�¿QDQFH�DQG�

compliance challenges, the story can sound similar from year to year. There are usually a handful of new regulations facing dealers and lenders that have made a big impact on the industry over the previous 12 months. %XW�WKLV�\HDU�GRHVQ¶W�UHDOO\�¿W�WKH�PROG��7KDW¶V�

because 2012 arguably hasn’t been as much about new regulation as about the additional scrutiny of regulators enforcing laws that have been in place for some time.

That has been particularly evident in the DUHDV�RI�VWDWH�VSHFL¿F�IRUPV��PRGHO�ODQJXDJH�and loan documentation. 6RPH�UHFHQW�H[DPSOHV�VXJJHVW�D�WUHQG�

that state regulators are taking a closer look DW�H[LVWLQJ�PRWRU�YHKLFOH�UHWDLO�VDOHV�¿QDQFLQJ�authority and transaction documentation:

New Mexico: 6LQFH��D�1HZ�0H[LFR�attorney general’s regulation has required creditors to provide a summary or a translation of English-language transaction documents in consumer sales negotiated in a language other than English. Its coverage is very broad and VRPHZKDW�GLI¿FXOW�WR�XQGHUVWDQG�7KLV�\HDU��WKH�1HZ�0H[LFR�DWWRUQH\�

general proposed additional changes to the regulation. After receiving comments, the

AG acknowledged issues with the proposed FKDQJHV�DQG�ZLWK�WKH�H[LVWLQJ�UHJXODWLRQ�LWVHOI��As a result, it pulled back the changes and UHSHDOHG�WKH�H[LVWLQJ�UHJXODWLRQ�WR�DOORZ�IRU�further study.

Michigan: Years ago, the Michigan Department of Licensing and Regulatory Affairs, 2I¿FH�RI�)LQDQFLDO�DQG�,QVXUDQFH�5HJXODWLRQ�(OFIR) said bad check charges are not allowed in motor vehicle retail contracts in spite of statutory authority that seems to allow it.

This year, the OFIR published a letter saying bad check charges cannot be collected on retail motor vehicle sales contracts unless the contract contains a bad check charge provision, indirectly reversing its prior position. The OFIR now holds that bad check charges are allowed DV�ORQJ�DV�WKH\�DUH�VSHFL¿FDOO\�DXWKRUL]HG�LQ�WKH�retail contract.

Montana: The Montana late charge authority is a bit ambiguous and has been that way for many years. Because of the ambiguity, there were vastly different interpretations in the marketplace. In response to a request, the Montana Division of Banking and Financial Institutions recently published a letter clarifying its interpretation of the state statute.

The apparently heightened state scrutiny might be just a coincidence. It could also be that states are demonstrating their diligence and control to the public and to the new federal Consumer Financial Protection Bureau (CFPB).

The CFPB regulates dealers who don’t URXWLQHO\�DVVLJQ�WKHLU�¿QDQFLQJ�FRQWUDFWV�WR�XQDI¿OLDWHG�WKLUG�SDUWLHV��)RU�WKH�PRVW�SDUW��WKDW�means the CFPB regulates Buy Here-Pay Here dealers. The Federal Trade Commission (FTC) continues to regulate the rest of the auto sales DQG�¿QDQFH�LQGXVWU\�

The net result is there are two federal UHJXODWRUV�LQ�WKH�DXWR�¿QDQFH�PDUNHWSODFH��,W¶V�possible states are more actively clarifying and HQIRUFLQJ�WKHLU�H[LVWLQJ�ODZV�DQG�UHJXODWLRQV�in an effort to maintain a level of control over WKH�DXWR�¿QDQFH�LQGXVWU\�±�KRSLQJ�WR�PLQLPL]H�federal oversight.,Q�DGGLWLRQ�WR�UHÀHFWLQJ�RQ�WKH�\HDU�WKDW�

has been, it’s also time to think about what might lie ahead. What will the new regulatory environment look like in 2013?

Many thought the CFPB would have done D�ORW�RI�UHJXODWRU\�FKDQJH�LQ�DXWR�¿QDQFLQJ�E\�now, but that hasn’t been the case. One reason LV�LW�KDV�EHHQ�IRFXVHG�RQ�UHDO�HVWDWH�¿QDQFLQJ�practices and disclosures. The CFPB also seems to be carefully studying the consumer ¿QDQFH�PDUNHWSODFH�±�DQG�HYHQ�FRQVXPHUV�– to lay a solid foundation for its regulatory oversight.

The CFPB’s strategic plan for 2013-18 notes one of its strategies is to “develop and maintain DQ�HI¿FLHQW�IDFW�EDVHG�DSSURDFK�WR�GHYHORSLQJ��HYDOXDWLQJ��UHYLVLQJ�DQG�¿QDOL]LQJ�UHJXODWLRQV�´³)DFW�EDVHG´�LV�D�NH\�WHUP��:H�KDYH�

seen the CFPB asking good questions and FRQGXFWLQJ�H[WHQVLYH�UHVHDUFK�RQ�DUHDV�LW�LV�

WDVNHG�ZLWK�RYHUVHHLQJ��)RU�H[DPSOH��WKH�&)3%�tested draft real estate disclosure documents with consumers in shopping malls.

The Dodd Frank Act requires the CFPB to research and provide policy guidance on whether arbitration provisions should be allowed in consumer credit (non-real estate) transactions. To start that process, the CFPB published a request for suggestions, data sources and strategies to study the issue.

It’s also clear the CFPB is not afraid to take a fresh approach to presenting transaction LQIRUPDWLRQ�WR�FRQVXPHUV��)RU�H[DPSOH��the CFPB published a proposed rule in July regarding integrated mortgage disclosures under RESPA and the Truth in Lending Act. Leading up to the proposed rule, it published a number of drafts trying various new disclosure formats and designs.7KDW�ZDV�RQH�RI�WKH�¿UVW�VLJQL¿FDQW�SURSRVHG�

rules from the CFPB, and the planning process LQYROYHG�H[WHQVLYH�UHVHDUFK�DQG�VROLFLWDWLRQ�RI�industry and consumer feedback. As a result, WKH�SURSRVHG�UXOH�DQG�H[SODQDWRU\�PDWHULDOV�DUH�more than 1,000 pages.

The upside is the CFPB is trying practical, consumer-tested ways to present information so average consumers can understand key transaction terms. The downside is the volume of information in the proposal is overwhelming.

It’s hard to know when the CFPB will complete its foundation-building and begin SURSRVLQJ�QHZ�UHJXODWLRQV�RU�UHYLVLQJ�H[LVWLQJ�RQHV�WKDW�DIIHFW�WKH�FRQVXPHU�DXWR�¿QDQFH�industry. It’s likely big changes will come to the market. It’s just unclear when.

While we’re in this waiting period, dealers might feel there are a lot of variables out of their control, but the focus needs to be on the areas you can control.

Since a number of states seem to be IRFXVHG�RQ�FODULI\LQJ�DQG�HQIRUFLQJ�H[LVWLQJ�requirements, dealers should review and button down compliance documentation and processes to make sure they are satisfying those requirements.

Additionally, reviewing and tightening transaction standards and communication within the dealership is key. Make sure your VDOHV�DQG�¿QDQFH�WHDPV�DUH�GHVFULELQJ�¿QDQFLQJ�WHUPV�DQG�RSWLRQV��YHKLFOH�IHDWXUHV��and add-on products and services in a correct and consistent manner. Educate your buyers and be direct and honest about each element of a transaction and the risks each party is assuming.

Investing in those areas can go a long way toward maintaining compliance now and preparing for what lies ahead.

C O M P L I A N C E OV E R D R I V E

Out with the Old and In with the New?

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Documents

CIADA Auto Dealer News Dec 2012